Correlation Between Apple and Tokyo Steel
Can any of the company-specific risk be diversified away by investing in both Apple and Tokyo Steel 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 Tokyo Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Tokyo Steel Manufacturing, you can compare the effects of market volatilities on Apple and Tokyo Steel 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 Tokyo Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Tokyo Steel.
Diversification Opportunities for Apple and Tokyo Steel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Tokyo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Tokyo Steel Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Steel Manufacturing 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 Tokyo Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Steel Manufacturing has no effect on the direction of Apple i.e., Apple and Tokyo Steel go up and down completely randomly.
Pair Corralation between Apple and Tokyo Steel
Given the investment horizon of 90 days Apple Inc is expected to generate 7.5 times more return on investment than Tokyo Steel. However, Apple is 7.5 times more volatile than Tokyo Steel Manufacturing. It trades about 0.17 of its potential returns per unit of risk. Tokyo Steel Manufacturing is currently generating about 0.12 per unit of risk. If you would invest 21,224 in Apple Inc on July 20, 2025 and sell it today you would earn a total of 4,005 from holding Apple Inc or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Apple Inc vs. Tokyo Steel Manufacturing
Performance |
| Timeline |
| Apple Inc |
| Tokyo Steel Manufacturing |
Apple and Tokyo Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Tokyo Steel
The main advantage of trading using opposite Apple and Tokyo Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Tokyo Steel 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 Tokyo Steel will offset losses from the drop in Tokyo Steel's long position.| Apple vs. AXIL Brands, | Apple vs. Turtle Beach | Apple vs. Algorhythm Holdings, | Apple vs. Universal Electronics |
| Tokyo Steel vs. Silicon Motion Technology | Tokyo Steel vs. Mitsui Chemicals ADR | Tokyo Steel vs. Quaker Chemical | Tokyo Steel vs. ZhongAn Online P |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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