Correlation Between Asia Pacific and Apple
Can any of the company-specific risk be diversified away by investing in both Asia Pacific 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 Asia Pacific and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Pacific Fibers and Apple Inc, you can compare the effects of market volatilities on Asia Pacific 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 Asia Pacific with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Apple.
Diversification Opportunities for Asia Pacific and Apple
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Apple is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Fibers and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Asia Pacific 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 Asia Pacific Fibers 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 Asia Pacific i.e., Asia Pacific and Apple go up and down completely randomly.
Pair Corralation between Asia Pacific and Apple
Assuming the 90 days trading horizon Asia Pacific Fibers is expected to under-perform the Apple. In addition to that, Asia Pacific is 2.75 times more volatile than Apple Inc. It trades about -0.48 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.18 per unit of volatility. If you would invest 19,364 in Apple Inc on January 20, 2024 and sell it today you would lose (2,660) from holding Apple Inc or give up 13.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.87% |
| Values | Daily Returns |
Asia Pacific Fibers vs. Apple Inc
Performance |
| Timeline |
| Asia Pacific Fibers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Apple Inc |
Asia Pacific and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Pacific and Apple
The main advantage of trading using opposite Asia Pacific and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific 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 Asia Pacific Fibers 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |