Correlation Between General Electric and APPTECH CORP

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

Diversification Opportunities for General Electric and APPTECH CORP

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between General and APPTECH is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding General Electric and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and General Electric 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 General Electric are associated (or correlated) with APPTECH CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPTECH CORP has no effect on the direction of General Electric i.e., General Electric and APPTECH CORP go up and down completely randomly.

Pair Corralation between General Electric and APPTECH CORP

Allowing for the 90-day total investment horizon General Electric is expected to generate 0.25 times more return on investment than APPTECH CORP. However, General Electric is 4.07 times less risky than APPTECH CORP. It trades about 0.67 of its potential returns per unit of risk. APPTECH CORP is currently generating about 0.15 per unit of risk. If you would invest  6,286  in General Electric on May 16, 2022 and sell it today you would earn a total of  1,707  from holding General Electric or generate 27.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

General Electric  vs.  APPTECH CORP

 Performance (%) 
       Timeline  
General Electric 
General Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish technical and fundamental indicators, General Electric may actually be approaching a critical reversion point that can send shares even higher in September 2022.

General Price Channel

APPTECH CORP 
APPTECH Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in APPTECH CORP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, APPTECH CORP showed solid returns over the last few months and may actually be approaching a breakup point.

APPTECH Price Channel

General Electric and APPTECH CORP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Electric and APPTECH CORP

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

General Electric

Pair trading matchups for General Electric

The idea behind General Electric and APPTECH CORP 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.

APPTECH CORP

Pair trading matchups for APPTECH CORP

Olema Pharmaceuticals vs. APPTECH CORP
Prog Hldgs vs. APPTECH CORP
Nike vs. APPTECH CORP
Ark Innovation vs. APPTECH CORP
Cto Realty vs. APPTECH CORP
Rolls Royce vs. APPTECH CORP
Horizon Therapeutics vs. APPTECH CORP
Essential Properties vs. APPTECH CORP
Semiconductor Bear vs. APPTECH CORP
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against APPTECH CORP as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. APPTECH CORP's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, APPTECH CORP's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to APPTECH CORP.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go