Correlation Between Apple and EBay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Apple and EBay 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 EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and EBay Inc, you can compare the effects of market volatilities on Apple and EBay 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 EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and EBay.

Diversification Opportunities for Apple and EBay

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Apple and EBay is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and EBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc 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 EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc has no effect on the direction of Apple i.e., Apple and EBay go up and down completely randomly.

Pair Corralation between Apple and EBay

Given the investment horizon of 90 days Apple Inc is expected to generate 1.04 times more return on investment than EBay. However, Apple is 1.04 times more volatile than EBay Inc. It trades about -0.09 of its potential returns per unit of risk. EBay Inc is currently generating about -0.17 per unit of risk. If you would invest  15,453  in Apple Inc on July 7, 2022 and sell it today you would lose (813.00)  from holding Apple Inc or give up 5.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  EBay Inc

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
0 of 100
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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

EBay Inc 
EBay Performance
0 of 100
Over the last 90 days EBay Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

EBay Price Channel

Apple and EBay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and EBay

The main advantage of trading using opposite Apple and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
Apple vs. Amazon Inc
The idea behind Apple Inc and EBay Inc 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.
EBay 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go