Correlation Between Appen and Crypto

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

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

Diversification Opportunities for Appen and Crypto

-0.17

Correlation Coefficient

Appen  Crypto

Good diversification

The 3 months correlation between Appen and Crypto is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto and Appen 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 Appen Limited are associated (or correlated) with Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of Appen i.e., Appen and Crypto go up and down completely randomly.

Pair Corralation between Appen and Crypto

If you would invest  99.00  in Appen Limited on September 3, 2024 and sell it today you would earn a total of  53.00  from holding Appen Limited or generate 53.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Appen Limited  vs.  Crypto Co

Appen Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Appen reported solid returns over the last few months and may actually be approaching a breakup point.

Crypto

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crypto Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Crypto is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Appen and Crypto

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

The idea behind Appen Limited and Crypto Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.