Correlation Between Apple and Autozone

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Can any of the company-specific risk be diversified away by investing in both Apple and Autozone 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 Autozone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Autozone, you can compare the effects of market volatilities on Apple and Autozone 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 Autozone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Autozone.

Diversification Opportunities for Apple and Autozone

0.87
  Correlation Coefficient

Very poor diversification

The 24 months correlation between Apple and Autozone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Autozone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autozone 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 Autozone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autozone has no effect on the direction of Apple i.e., Apple and Autozone go up and down completely randomly.

Pair Corralation between Apple and Autozone

Given the investment horizon of 90 days Apple is expected to generate 1.34 times less return on investment than Autozone. In addition to that, Apple is 1.23 times more volatile than Autozone. It trades about 0.05 of its total potential returns per unit of risk. Autozone is currently generating about 0.09 per unit of volatility. If you would invest  113,738  in Autozone on March 28, 2022 and sell it today you would earn a total of  102,153  from holding Autozone or generate 89.81% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  Autozone

 Performance (%) 
      Timeline 
Apple Inc 
Apple Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.007
Payout Ratio
0.14
Last Split Factor
4:1
Forward Annual Dividend Rate
0.92
Dividend Date
2022-05-12
Ex Dividend Date
2022-05-06
Last Split Date
2020-08-31

Apple Price Channel

Autozone 
Autozone Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Autozone are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Autozone may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Last Split Factor
2:1
Last Split Date
1994-04-21

Autozone Price Channel

Apple and Autozone Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Apple and Autozone

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

Autozone

Pair trading matchups for Autozone

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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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