Correlation Between Apple and Marie Brizard

Can any of the company-specific risk be diversified away by investing in both Apple and Marie Brizard 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 Apple and Marie Brizard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Marie Brizard Wine, you can compare the effects of market volatilities on Apple and Marie Brizard 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 Apple with a short position of Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Marie Brizard.

Diversification Opportunities for Apple and Marie Brizard

0.81

Correlation Coefficient

Apple  Marie Brizard

Very poor diversification

The 3 months correlation between Apple and Marie is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine and Apple 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 Apple Inc are associated (or correlated) with Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of Apple i.e., Apple and Marie Brizard go up and down completely randomly.

Pair Corralation between Apple and Marie Brizard

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.29 times more return on investment than Marie Brizard. However, Apple is 1.29 times more volatile than Marie Brizard Wine. It trades about 0.19 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about 0.09 per unit of risk. If you would invest  15,929  in Apple Inc on March 14, 2024 and sell it today you would earn a total of  3,145  from holding Apple Inc or generate 19.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  Marie Brizard Wine

Apple Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Marie Brizard Wine

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marie Brizard Wine are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marie Brizard may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Apple and Marie Brizard

The main advantage of trading using opposite Apple and Marie Brizard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Marie Brizard 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 Marie Brizard will offset losses from the drop in Marie Brizard's long position.

The idea behind Apple Inc and Marie Brizard Wine 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.

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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.