Correlation Between Shift4 Payments and Apple

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Can any of the company-specific risk be diversified away by investing in both Shift4 Payments and Apple 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 Shift4 Payments and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift4 Payments and Apple Inc, you can compare the effects of market volatilities on Shift4 Payments and Apple 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 Shift4 Payments with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and Apple.

Diversification Opportunities for Shift4 Payments and Apple

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Shift4 and Apple is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Shift4 Payments 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 Shift4 Payments are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Shift4 Payments i.e., Shift4 Payments and Apple go up and down completely randomly.

Pair Corralation between Shift4 Payments and Apple

Given the investment horizon of 90 days Shift4 Payments is expected to under-perform the Apple. In addition to that, Shift4 Payments is 2.12 times more volatile than Apple Inc. It trades about 0.0 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.0 per unit of volatility. If you would invest  14,987  in Apple Inc on August 31, 2022 and sell it today you would lose (870.00)  from holding Apple Inc or give up 5.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Shift4 Payments  vs.  Apple Inc

 Performance (%) 
       Timeline  
Shift4 Payments 
Shift4 Performance
0 of 100
Over the last 90 days Shift4 Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Shift4 Payments is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Shift4 Price Channel

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 latest unfluctuating performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Apple Price Channel

Shift4 Payments and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shift4 Payments and Apple

The main advantage of trading using opposite Shift4 Payments and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
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The idea behind Shift4 Payments and Apple 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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