Correlation Between Apple and Large Cap

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

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

Diversification Opportunities for Apple and Large Cap

0.23

Correlation Coefficient

Apple  Large Cap

Modest diversification

The 3 months correlation between Apple and Large is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Apple i.e., Apple and Large Cap go up and down completely randomly.

Pair Corralation between Apple and Large Cap

Given the investment horizon of 90 days Apple Inc is expected to generate 1.72 times more return on investment than Large Cap. However, Apple is 1.72 times more volatile than Large Cap Value. It trades about 0.21 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.07 per unit of risk. If you would invest  23,412  in Apple Inc on September 9, 2025 and sell it today you would earn a total of  4,466  from holding Apple Inc or generate 19.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Apple Inc  vs.  Large Cap Value

Apple Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

Large Cap Value

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Value are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Large Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apple and Large Cap

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

The idea behind Apple Inc and Large Cap Value 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.