Correlation Between AppTech Payments and Evertec

Can any of the company-specific risk be diversified away by investing in both AppTech Payments and Evertec 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 AppTech Payments and Evertec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AppTech Payments Corp and Evertec, you can compare the effects of market volatilities on AppTech Payments and Evertec 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 AppTech Payments with a short position of Evertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of AppTech Payments and Evertec.

Diversification Opportunities for AppTech Payments and Evertec

-0.38

Correlation Coefficient

AppTech Payments  Evertec

Very good diversification

The 3 months correlation between AppTech and Evertec is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AppTech Payments Corp and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and AppTech 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 AppTech Payments Corp are associated (or correlated) with Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of AppTech Payments i.e., AppTech Payments and Evertec go up and down completely randomly.

Pair Corralation between AppTech Payments and Evertec

Assuming the 90 days horizon AppTech Payments Corp is expected to generate 7.64 times more return on investment than Evertec. However, AppTech Payments is 7.64 times more volatile than Evertec. It trades about 0.02 of its potential returns per unit of risk. Evertec is currently generating about 0.05 per unit of risk. If you would invest  17.00  in AppTech Payments Corp on September 16, 2024 and sell it today you would lose (1.00) from holding AppTech Payments Corp or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

AppTech Payments Corp  vs.  Evertec

AppTech Payments Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AppTech Payments Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Evertec

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AppTech Payments and Evertec

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

The idea behind AppTech Payments Corp and Evertec 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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.