Correlation Between Apple and Investment
Can any of the company-specific risk be diversified away by investing in both Apple and Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Apple and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and The Investment, you can compare the effects of market volatilities on Apple and Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Apple with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Investment.
Diversification Opportunities for Apple and Investment
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Apple and Investment is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Apple is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Apple Inc are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Apple i.e., Apple and Investment go up and down completely randomly.
Pair Corralation between Apple and Investment
Given the investment horizon of 90 days Apple Inc is expected to generate 1.73 times more return on investment than Investment. However, Apple is 1.73 times more volatile than The Investment. It trades about 0.19 of its potential returns per unit of risk. The Investment is currently generating about -0.04 per unit of risk. If you would invest 23,067 in Apple Inc on August 16, 2025 and sell it today you would earn a total of 4,228 from holding Apple Inc or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. The Investment
Performance |
| Timeline |
| Apple Inc |
| Investment |
Apple and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Investment
The main advantage of trading using opposite Apple and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Investment will offset losses from the drop in Investment's long position.The idea behind Apple Inc and The Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Investment vs. Samsung Electronics Co | Investment vs. Samsung Electronics Co | Investment vs. Samsung Electronics Co | Investment vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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