Correlation Between Apple and TCL Electronics

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

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

Diversification Opportunities for Apple and TCL Electronics

0.01

Correlation Coefficient

Apple  TCL Electronics

Significant diversification

The 3 months correlation between Apple and TCL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and TCL Electronics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Electronics Holdings 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 TCL Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Electronics Holdings has no effect on the direction of Apple i.e., Apple and TCL Electronics go up and down completely randomly.

Pair Corralation between Apple and TCL Electronics

Given the investment horizon of 90 days Apple Inc is expected to under-perform the TCL Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 13.47 times less risky than TCL Electronics. The stock trades about 0.0 of its potential returns per unit of risk. The TCL Electronics Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  67.00  in TCL Electronics Holdings on May 1, 2025 and sell it today you would earn a total of  51.00  from holding TCL Electronics Holdings or generate 76.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Apple Inc  vs.  TCL Electronics Holdings

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 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.

TCL Electronics Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TCL Electronics Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, TCL Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and TCL Electronics

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

The idea behind Apple Inc and TCL Electronics Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.