Correlation Between Apple and EMPEROR ENT

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

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

Diversification Opportunities for Apple and EMPEROR ENT

-0.04

Correlation Coefficient

Apple  EMPEROR ENT

Good diversification

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

Pair Corralation between Apple and EMPEROR ENT

Assuming the 90 days trading horizon Apple is expected to generate 10.9 times less return on investment than EMPEROR ENT. But when comparing it to its historical volatility, Apple Inc is 2.73 times less risky than EMPEROR ENT. It trades about 0.01 of its potential returns per unit of risk. EMPEROR ENT HOTEL is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.90  in EMPEROR ENT HOTEL on April 24, 2025 and sell it today you would earn a total of  0.10  from holding EMPEROR ENT HOTEL or generate 3.45% 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.  EMPEROR ENT HOTEL

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 comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

EMPEROR ENT HOTEL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EMPEROR ENT HOTEL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, EMPEROR ENT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Apple and EMPEROR ENT

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

The idea behind Apple Inc and EMPEROR ENT HOTEL 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.