Correlation Between Federal Home and Apple

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

By analyzing existing cross correlation between Federal Home Loan and Apple Inc, you can compare the effects of market volatilities on Federal Home and Apple 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 Federal Home with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Apple.

Diversification Opportunities for Federal Home and Apple

-0.48

Correlation Coefficient

Federal Home  Apple

Very good diversification

The 3 months correlation between Federal and Apple is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Federal Home 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 Federal Home Loan are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Federal Home i.e., Federal Home and Apple go up and down completely randomly.

Pair Corralation between Federal Home and Apple

Assuming the 90 days horizon Federal Home Loan is expected to generate 3.4 times more return on investment than Apple. However, Federal Home is 3.4 times more volatile than Apple Inc. It trades about 0.1 of its potential returns per unit of risk. Apple Inc is currently generating about 0.01 per unit of risk. If you would invest  458.00  in Federal Home Loan on April 24, 2025 and sell it today you would earn a total of  132.00  from holding Federal Home Loan or generate 28.82% return on investment over 90 days.

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

Federal Home Loan  vs.  Apple Inc

Federal Home Loan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Federal Home reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite somewhat strong fundamental indicators, Apple is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federal Home and Apple

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

The idea behind Federal Home Loan and Apple Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.