Correlation Between Apple and SEKISUI CHEMICAL

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

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

Diversification Opportunities for Apple and SEKISUI CHEMICAL

0.29

Correlation Coefficient

Apple  SEKISUI CHEMICAL

Modest diversification

The 3 months correlation between Apple and SEKISUI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of Apple i.e., Apple and SEKISUI CHEMICAL go up and down completely randomly.

Pair Corralation between Apple and SEKISUI CHEMICAL

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.42 times more return on investment than SEKISUI CHEMICAL. However, Apple is 1.42 times more volatile than SEKISUI CHEMICAL. It trades about 0.04 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about -0.04 per unit of risk. If you would invest  17,477  in Apple Inc on April 21, 2025 and sell it today you would earn a total of  659.00  from holding Apple Inc or generate 3.77% return on investment over 90 days.

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

Apple Inc  vs.  SEKISUI CHEMICAL

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. 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.

SEKISUI CHEMICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEKISUI CHEMICAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, SEKISUI CHEMICAL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and SEKISUI CHEMICAL

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

The idea behind Apple Inc and SEKISUI CHEMICAL 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.