Correlation Between Energous and Apple
Can any of the company-specific risk be diversified away by investing in both Energous 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 Energous and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energous and Apple Inc, you can compare the effects of market volatilities on Energous 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 Energous with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energous and Apple.
Diversification Opportunities for Energous and Apple
Modest diversification
The 3 months correlation between Energous and Apple is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Energous and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Energous 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 Energous 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 Energous i.e., Energous and Apple go up and down completely randomly.
Pair Corralation between Energous and Apple
Given the investment horizon of 90 days Energous is expected to under-perform the Apple. In addition to that, Energous is 4.65 times more volatile than Apple Inc. It trades about -0.05 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.15 per unit of volatility. If you would invest 19,217 in Apple Inc on January 26, 2024 and sell it today you would lose (2,315) from holding Apple Inc or give up 12.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energous vs. Apple Inc
Performance |
| Timeline |
| Energous |
| Apple Inc |
Energous and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energous and Apple
The main advantage of trading using opposite Energous and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energous 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.| Energous vs. AERWINS Technologies | Energous vs. Cepton Inc | Energous vs. SaverOne 2014 Ltd | Energous vs. Mind Technology Pref |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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