Correlation Between High Income and Apple
Can any of the company-specific risk be diversified away by investing in both High Income 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 High Income and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Income Fund and Apple Inc, you can compare the effects of market volatilities on High Income 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 High Income with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Income and Apple.
Diversification Opportunities for High Income and Apple
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High and Apple is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding High Income Fund and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and High Income 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 High Income Fund 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 High Income i.e., High Income and Apple go up and down completely randomly.
Pair Corralation between High Income and Apple
Assuming the 90 days horizon High Income Fund is expected to under-perform the Apple. But the mutual fund apears to be less risky and, when comparing its historical volatility, High Income Fund is 5.72 times less risky than Apple. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 17,372 in Apple Inc on January 17, 2024 and sell it today you would lose (103.00) from holding Apple Inc or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Income Fund vs. Apple Inc
Performance |
| Timeline |
| High Me Fund |
| Apple Inc |
High Income and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Income and Apple
The main advantage of trading using opposite High Income and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Income 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.| High Income vs. Income Fund Income | High Income vs. Usaa Nasdaq 100 | High Income vs. Victory Diversified Stock | High Income vs. Intermediate Term Bond Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |