Correlation Between Apple and Utime

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

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

Diversification Opportunities for Apple and Utime

-0.04

Correlation Coefficient

Apple  Utime

Good diversification

The 3 months correlation between Apple and Utime is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Utime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utime 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 Utime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utime has no effect on the direction of Apple i.e., Apple and Utime go up and down completely randomly.

Pair Corralation between Apple and Utime

If you would invest  23,493  in Apple Inc on September 28, 2024 and sell it today you would earn a total of  1,825  from holding Apple Inc or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Apple Inc  vs.  Utime

Apple Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Utime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Utime is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and Utime

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

The idea behind Apple Inc and Utime 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.