Correlation Between Apple and UNITED INTERNET

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

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

Diversification Opportunities for Apple and UNITED INTERNET

-0.27

Correlation Coefficient

Apple  UNITED INTERNET

Very good diversification

The 3 months correlation between Apple and UNITED is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and UNITED INTERNET N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED INTERNET N 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 UNITED INTERNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED INTERNET N has no effect on the direction of Apple i.e., Apple and UNITED INTERNET go up and down completely randomly.

Pair Corralation between Apple and UNITED INTERNET

Assuming the 90 days trading horizon Apple is expected to generate 18.12 times less return on investment than UNITED INTERNET. But when comparing it to its historical volatility, Apple Inc is 1.54 times less risky than UNITED INTERNET. It trades about 0.02 of its potential returns per unit of risk. UNITED INTERNET N is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,760  in UNITED INTERNET N on April 24, 2025 and sell it today you would earn a total of  756.00  from holding UNITED INTERNET N or generate 42.95% 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.  UNITED INTERNET N

Apple Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Apple is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

UNITED INTERNET N

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED INTERNET N are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, UNITED INTERNET unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and UNITED INTERNET

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

The idea behind Apple Inc and UNITED INTERNET N 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.