Correlation Between IRobot and Apple
Can any of the company-specific risk be diversified away by investing in both IRobot 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 IRobot and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Apple Inc, you can compare the effects of market volatilities on IRobot 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 IRobot with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Apple.
Diversification Opportunities for IRobot and Apple
Almost no diversification
The 3 months correlation between IRobot and Apple is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iRobot and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and IRobot 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 iRobot 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 IRobot i.e., IRobot and Apple go up and down completely randomly.
Pair Corralation between IRobot and Apple
Given the investment horizon of 90 days iRobot is expected to under-perform the Apple. In addition to that, IRobot is 4.2 times more volatile than Apple Inc. It trades about -0.08 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.03 per unit of volatility. If you would invest 17,085 in Apple Inc on January 25, 2024 and sell it today you would lose (178.50) from holding Apple Inc or give up 1.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iRobot vs. Apple Inc
Performance |
Timeline |
iRobot |
Apple Inc |
IRobot and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IRobot and Apple
The main advantage of trading using opposite IRobot and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot 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.IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Positions Ratings 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 | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities |