Correlation Between Gannett and Apple
Can any of the company-specific risk be diversified away by investing in both Gannett 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 Gannett and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gannett Co and Apple Inc, you can compare the effects of market volatilities on Gannett 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 Gannett with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gannett and Apple.
Diversification Opportunities for Gannett and Apple
Weak diversification
The 3 months correlation between Gannett and Apple is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gannett Co and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Gannett 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 Gannett Co 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 Gannett i.e., Gannett and Apple go up and down completely randomly.
Pair Corralation between Gannett and Apple
Considering the 90-day investment horizon Gannett Co is expected to generate 3.12 times more return on investment than Apple. However, Gannett is 3.12 times more volatile than Apple Inc. It trades about 0.04 of its potential returns per unit of risk. Apple Inc is currently generating about 0.0 per unit of risk. If you would invest 216.00 in Gannett Co on January 19, 2024 and sell it today you would earn a total of 34.00 from holding Gannett Co or generate 15.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gannett Co vs. Apple Inc
Performance |
Timeline |
Gannett |
Apple Inc |
Gannett and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gannett and Apple
The main advantage of trading using opposite Gannett and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gannett 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.Gannett vs. Dallasnews Corp | Gannett vs. Scholastic | Gannett vs. Pearson PLC ADR | Gannett vs. New York Times |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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