Correlation Between Apple and Technology Ultrasector

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

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

Diversification Opportunities for Apple and Technology Ultrasector

0.87

Correlation Coefficient

Apple  Technology Ultrasector

Very poor diversification

The 3 months correlation between Apple and Technology is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Technology Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Ultrasector 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 Technology Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Ultrasector has no effect on the direction of Apple i.e., Apple and Technology Ultrasector go up and down completely randomly.

Pair Corralation between Apple and Technology Ultrasector

Given the investment horizon of 90 days Apple Inc is expected to generate 1.01 times more return on investment than Technology Ultrasector. However, Apple is 1.01 times more volatile than Technology Ultrasector Profund. It trades about 0.25 of its potential returns per unit of risk. Technology Ultrasector Profund is currently generating about 0.2 per unit of risk. If you would invest  20,733  in Apple Inc on July 31, 2025 and sell it today you would earn a total of  6,237  from holding Apple Inc or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Apple Inc  vs.  Technology Ultrasector Profund

Apple Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

Technology Ultrasector

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Ultrasector Profund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Technology Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Technology Ultrasector

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

The idea behind Apple Inc and Technology Ultrasector Profund 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 Global Correlations module to find global opportunities by holding instruments from different markets.