This module allows you to analyze existing cross correlation between Apple and Sprint Corporation. You can compare the effects of market volatilities on Apple and Sprint 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 Sprint. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and Sprint.
Given the investment horizon of 30 days, Apple is expected to generate 1.01 times less return on investment than Sprint. But when comparing it to its historical volatility, Apple is 1.64 times less risky than Sprint. It trades about 0.4 of its potential returns per unit of risk. Sprint Corporation is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Sprint Corporation on July 21, 2018 and sell it today you would earn a total of 72.00 from holding Sprint Corporation or generate 13.31% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Sprint Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Sprint 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 are associated (or correlated) with Sprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprint has no effect on the direction of Apple i.e. Apple and Sprint go up and down completely randomly.
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