Correlation Between Alleghany and Apple
Can any of the company-specific risk be diversified away by investing in both Alleghany 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 Alleghany and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alleghany and Apple Inc, you can compare the effects of market volatilities on Alleghany 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 Alleghany with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alleghany and Apple.
Diversification Opportunities for Alleghany and Apple
Pay attention - limited upside
The 3 months correlation between Alleghany and Apple is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alleghany and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alleghany 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 Alleghany 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 Alleghany i.e., Alleghany and Apple go up and down completely randomly.
Pair Corralation between Alleghany and Apple
If you would invest 84,779 in Alleghany on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Alleghany or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Alleghany vs. Apple Inc
Performance |
Timeline |
Alleghany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apple Inc |
Alleghany and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alleghany and Apple
The main advantage of trading using opposite Alleghany and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alleghany 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.Alleghany vs. Jeld Wen Holding | Alleghany vs. ChampionX | Alleghany vs. Tyson Foods | Alleghany vs. Wicket Gaming AB |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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