Correlation Between Apple and One Global

Can any of the company-specific risk be diversified away by investing in both Apple and One Global 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 One Global 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 One Global Equity, you can compare the effects of market volatilities on Apple and One Global 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 One Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and One Global.

Diversification Opportunities for Apple and One Global

-0.82

Correlation Coefficient

Apple  One Global

Pay attention - limited upside

The 3 months correlation between Apple and One is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and One Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Global Equity 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 One Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Global Equity has no effect on the direction of Apple i.e., Apple and One Global go up and down completely randomly.

Pair Corralation between Apple and One Global

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 2.86 times more return on investment than One Global. However, Apple is 2.86 times more volatile than One Global Equity. It trades about 0.18 of its potential returns per unit of risk. One Global Equity is currently generating about -0.05 per unit of risk. If you would invest  2,514  in Apple Inc CDR on February 5, 2024 and sell it today you would earn a total of  192.00  from holding Apple Inc CDR or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Apple Inc CDR  vs.  One Global Equity

Apple Inc CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Apple is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

One Global Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One Global Equity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, One Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apple and One Global

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

The idea behind Apple Inc CDR and One Global Equity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.