Correlation Between Apple and FFB Bancorp

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

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

Diversification Opportunities for Apple and FFB Bancorp

0.8

Correlation Coefficient

Apple  FFB Bancorp

Very poor diversification

The 3 months correlation between Apple and FFB is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and FFB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFB Bancorp 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 FFB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFB Bancorp has no effect on the direction of Apple i.e., Apple and FFB Bancorp go up and down completely randomly.

Pair Corralation between Apple and FFB Bancorp

Given the investment horizon of 90 days Apple Inc is expected to generate 1.44 times more return on investment than FFB Bancorp. However, Apple is 1.44 times more volatile than FFB Bancorp. It trades about 0.2 of its potential returns per unit of risk. FFB Bancorp is currently generating about 0.07 per unit of risk. If you would invest  21,381  in Apple Inc on July 26, 2025 and sell it today you would earn a total of  4,901  from holding Apple Inc or generate 22.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Apple Inc  vs.  FFB Bancorp

Apple Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

FFB Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in FFB Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, FFB Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apple and FFB Bancorp

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

The idea behind Apple Inc and FFB Bancorp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.