Correlation Between East West and Apple

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both East West and Apple 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 East West and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Bancorp and Apple Inc, you can compare the effects of market volatilities on East West and Apple 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 East West with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Apple.

Diversification Opportunities for East West and Apple

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between East and Apple is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding East West Bancorp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and East West 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 East West Bancorp are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of East West i.e., East West and Apple go up and down completely randomly.

Pair Corralation between East West and Apple

Given the investment horizon of 90 days East West Bancorp is expected to generate 1.12 times more return on investment than Apple. However, East West is 1.12 times more volatile than Apple Inc. It trades about 0.26 of its potential returns per unit of risk. Apple Inc is currently generating about -0.16 per unit of risk. If you would invest  7,213  in East West Bancorp on December 30, 2023 and sell it today you would earn a total of  698.00  from holding East West Bancorp or generate 9.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

East West Bancorp  vs.  Apple Inc

 Performance 
       Timeline  
East West Bancorp 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in East West Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, East West may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

East West and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with East West and Apple

The main advantage of trading using opposite East West and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind East West Bancorp and Apple Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency