Correlation Between Apple and Rio Tinto
Can any of the company-specific risk be diversified away by investing in both Apple and Rio Tinto 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 Rio Tinto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Rio Tinto Group, you can compare the effects of market volatilities on Apple and Rio Tinto 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 Rio Tinto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Rio Tinto.
Diversification Opportunities for Apple and Rio Tinto
Poor diversification
The 3 months correlation between Apple and Rio is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Rio Tinto Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio Tinto Group 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 Rio Tinto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio Tinto Group has no effect on the direction of Apple i.e., Apple and Rio Tinto go up and down completely randomly.
Pair Corralation between Apple and Rio Tinto
Assuming the 90 days trading horizon Apple is expected to generate 3.52 times less return on investment than Rio Tinto. In addition to that, Apple is 1.13 times more volatile than Rio Tinto Group. It trades about 0.07 of its total potential returns per unit of risk. Rio Tinto Group is currently generating about 0.26 per unit of volatility. If you would invest 5,522 in Rio Tinto Group on September 26, 2025 and sell it today you would earn a total of 1,336 from holding Rio Tinto Group or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Rio Tinto Group
Performance |
| Timeline |
| Apple Inc |
| Rio Tinto Group |
Apple and Rio Tinto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Rio Tinto
The main advantage of trading using opposite Apple and Rio Tinto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Rio Tinto 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 Rio Tinto will offset losses from the drop in Rio Tinto's long position.The idea behind Apple Inc and Rio Tinto Group 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.| Rio Tinto vs. BHP Group Limited | Rio Tinto vs. BHP Group Limited | Rio Tinto vs. Rio Tinto Group | Rio Tinto vs. Vale SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |