Correlation Between Apple and Azure Power

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

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

Diversification Opportunities for Apple and Azure Power

-0.18

Correlation Coefficient

Apple  Azure Power

Good diversification

The 3 months correlation between Apple and Azure is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global 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 Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of Apple i.e., Apple and Azure Power go up and down completely randomly.

Pair Corralation between Apple and Azure Power

Given the investment horizon of 90 days Apple is expected to generate 699.76 times less return on investment than Azure Power. But when comparing it to its historical volatility, Apple Inc is 13.2 times less risky than Azure Power. It trades about 0.0 of its potential returns per unit of risk. Azure Power Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Azure Power Global on April 30, 2025 and sell it today you would earn a total of  25.00  from holding Azure Power Global or generate 50.0% 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.  Azure Power Global

Apple Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Apple is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Azure Power Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Power Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Azure Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Azure Power

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

The idea behind Apple Inc and Azure Power Global 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.