Correlation Between Apple and Healthequity

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

Diversification Opportunities for Apple and Healthequity

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Apple and Healthequity is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Healthequity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthequity 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 Healthequity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthequity has no effect on the direction of Apple i.e., Apple and Healthequity go up and down completely randomly.

Pair Corralation between Apple and Healthequity

Given the investment horizon of 90 days Apple Inc is expected to under-perform the Healthequity. In addition to that, Apple is 1.15 times more volatile than Healthequity. It trades about -0.02 of its total potential returns per unit of risk. Healthequity is currently generating about 0.21 per unit of volatility. If you would invest  6,098  in Healthequity on March 27, 2022 and sell it today you would earn a total of  583.00  from holding Healthequity or generate 9.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  Healthequity

 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 weak performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in July 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

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

Healthequity 
Healthequity Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Healthequity is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Healthequity Price Channel

Apple and Healthequity Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Apple and Healthequity

The main advantage of trading using opposite Apple and Healthequity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Healthequity 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 Healthequity will offset losses from the drop in Healthequity's long position.
The idea behind Apple Inc and Healthequity 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.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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