Correlation Between Apple and OPERA SOFTWARE

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

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

Diversification Opportunities for Apple and OPERA SOFTWARE

-0.59

Correlation Coefficient

Apple  OPERA SOFTWARE

Excellent diversification

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

Pair Corralation between Apple and OPERA SOFTWARE

Assuming the 90 days trading horizon Apple is expected to generate 2.34 times less return on investment than OPERA SOFTWARE. But when comparing it to its historical volatility, Apple Inc is 1.38 times less risky than OPERA SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  63.00  in OPERA SOFTWARE on February 16, 2025 and sell it today you would earn a total of  30.00  from holding OPERA SOFTWARE or generate 47.62% return on investment over 90 days.

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

Apple Inc  vs.  OPERA SOFTWARE

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

OPERA SOFTWARE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OPERA SOFTWARE are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, OPERA SOFTWARE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and OPERA SOFTWARE

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

The idea behind Apple Inc and OPERA SOFTWARE 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.