Correlation Between Apple and Apple CDR

Can any of the company-specific risk be diversified away by investing in both Apple and Apple CDR 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 Apple CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc CDR and Apple CDR, you can compare the effects of market volatilities on Apple and Apple CDR 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 Apple CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Apple CDR.

Diversification Opportunities for Apple and Apple CDR

1.0

Correlation Coefficient

Apple  Apple CDR

No risk reduction

The 3 months correlation between Apple and Apple is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Apple CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple CDR 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 CDR are associated (or correlated) with Apple CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple CDR has no effect on the direction of Apple i.e., Apple and Apple CDR go up and down completely randomly.

Pair Corralation between Apple and Apple CDR

Assuming the 90 days trading horizon If you would invest  2,736  in Apple CDR on April 4, 2025 and sell it today you would earn a total of  335.00  from holding Apple CDR or generate 12.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Apple Inc CDR  vs.  Apple CDR

Apple Inc CDR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

Apple CDR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apple CDR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Apple CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Apple CDR

The main advantage of trading using opposite Apple and Apple CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Apple CDR 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 Apple CDR will offset losses from the drop in Apple CDR's long position.

The idea behind Apple Inc CDR and Apple CDR 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.