Correlation Between NBT Bancorp and Apple

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

Diversification Opportunities for NBT Bancorp and Apple

0.5
  Correlation Coefficient

Very weak diversification

The 12 months correlation between NBT and Apple is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NBT Bancorp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and NBT Bancorp 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 NBT 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 NBT Bancorp i.e., NBT Bancorp and Apple go up and down completely randomly.

Pair Corralation between NBT Bancorp and Apple

Given the investment horizon of 90 days NBT Bancorp is expected to generate 1.55 times more return on investment than Apple. However, NBT Bancorp is 1.55 times more volatile than Apple Inc. It trades about 0.05 of its potential returns per unit of risk. Apple Inc is currently generating about -0.04 per unit of risk. If you would invest  3,156  in NBT Bancorp on December 29, 2023 and sell it today you would earn a total of  518.00  from holding NBT Bancorp or generate 16.41% return on investment over 90 days.
Time Period12 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

NBT Bancorp  vs.  Apple Inc

 Performance 
       Timeline  
NBT Bancorp 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in NBT Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NBT Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Apple Inc 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Apple is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

NBT Bancorp and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NBT Bancorp and Apple

The main advantage of trading using opposite NBT Bancorp and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBT Bancorp 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 NBT 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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