Correlation Between Irobot Corp and Apple

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

Diversification Opportunities for Irobot Corp and Apple

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Irobot and Apple is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Irobot Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Irobot Corp 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 Irobot Corp 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 Irobot Corp i.e., Irobot Corp and Apple go up and down completely randomly.

Pair Corralation between Irobot Corp and Apple

Given the investment horizon of 90 days Irobot Corp is expected to generate 0.17 times more return on investment than Apple. However, Irobot Corp is 6.0 times less risky than Apple. It trades about -0.21 of its potential returns per unit of risk. Apple Inc is currently generating about -0.16 per unit of risk. If you would invest  5,865  in Irobot Corp on June 28, 2022 and sell it today you would lose (84.00)  from holding Irobot Corp or give up 1.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Irobot Corp  vs.  Apple Inc

 Performance (%) 
       Timeline  
Irobot Corp 
Irobot Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Irobot Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish fundamental drivers, Irobot Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Irobot Price Channel

Apple Inc 
Apple Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple Price Channel

Irobot Corp and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Irobot Corp and Apple

The main advantage of trading using opposite Irobot Corp and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Irobot Corp 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.
Irobot Corp vs. Sigma Lithium Corp
The idea behind Irobot Corp 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.
Apple vs. BUSHVELD MINERALS LTD
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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