Correlation Between Apple and ISA ENERGIA

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

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

Diversification Opportunities for Apple and ISA ENERGIA

-0.04

Correlation Coefficient

Apple  ISA ENERGIA

Good diversification

The 3 months correlation between Apple and ISA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ISA ENERGIA BRASIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISA ENERGIA BRASIL 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 ISA ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISA ENERGIA BRASIL has no effect on the direction of Apple i.e., Apple and ISA ENERGIA go up and down completely randomly.

Pair Corralation between Apple and ISA ENERGIA

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.46 times more return on investment than ISA ENERGIA. However, Apple is 1.46 times more volatile than ISA ENERGIA BRASIL. It trades about 0.05 of its potential returns per unit of risk. ISA ENERGIA BRASIL is currently generating about 0.01 per unit of risk. If you would invest  5,675  in Apple Inc on April 22, 2025 and sell it today you would earn a total of  237.00  from holding Apple Inc or generate 4.18% return on investment over 90 days.

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

Apple Inc  vs.  ISA ENERGIA BRASIL

Apple Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Apple is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ISA ENERGIA BRASIL

Risk-Adjusted Performance

Very Weak

Over the last 90 days ISA ENERGIA BRASIL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ISA ENERGIA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apple and ISA ENERGIA

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

The idea behind Apple Inc and ISA ENERGIA BRASIL 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.