Correlation Between Apple and Turtle Beach

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

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

Diversification Opportunities for Apple and Turtle Beach

-0.59

Correlation Coefficient

Apple  Turtle Beach

Excellent diversification

The 3 months correlation between Apple and Turtle is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp 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 Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of Apple i.e., Apple and Turtle Beach go up and down completely randomly.

Pair Corralation between Apple and Turtle Beach

Given the investment horizon of 90 days Apple is expected to generate 2.25 times less return on investment than Turtle Beach. But when comparing it to its historical volatility, Apple Inc is 2.44 times less risky than Turtle Beach. It trades about 0.02 of its potential returns per unit of risk. Turtle Beach Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,698  in Turtle Beach Corp on January 20, 2024 and sell it today you would lose (254.00) from holding Turtle Beach Corp or give up 14.96% of portfolio value over 90 days.

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

Apple Inc  vs.  Turtle Beach Corp

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Turtle Beach Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Turtle Beach

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

The idea behind Apple Inc and Turtle Beach Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.