Correlation Between Apple and DAIMLER AG

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

Diversification Opportunities for Apple and DAIMLER AG

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Apple and DAIMLER is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and DAIMLER AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIMLER AG 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 DAIMLER AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIMLER AG has no effect on the direction of Apple i.e., Apple and DAIMLER AG go up and down completely randomly.

Pair Corralation between Apple and DAIMLER AG

Given the investment horizon of 90 days Apple Inc is expected to under-perform the DAIMLER AG. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.13 times less risky than DAIMLER AG. The stock trades about -0.2 of its potential returns per unit of risk. The DAIMLER AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,636  in DAIMLER AG on July 2, 2022 and sell it today you would earn a total of  33.00  from holding DAIMLER AG or generate 0.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy71.43%
ValuesDaily Returns

Apple Inc  vs.  DAIMLER AG

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, Apple is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Apple Price Channel

DAIMLER AG 
DAIMLER Performance
0 of 100
Over the last 90 days DAIMLER AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather conflicting forward indicators, DAIMLER AG may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple and DAIMLER AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and DAIMLER AG

The main advantage of trading using opposite Apple and DAIMLER AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, DAIMLER AG 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 DAIMLER AG will offset losses from the drop in DAIMLER AG's long position.
Apple vs. Amazon Inc
The idea behind Apple Inc and DAIMLER AG 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.
DAIMLER AG vs. Amazon Inc
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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