Correlation Between Fact and Appen

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

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

Diversification Opportunities for Fact and Appen

0.0

Correlation Coefficient

Fact  Appen

Pay attention - limited upside

The 3 months correlation between Fact and Appen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fact Inc and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Fact 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 Fact Inc are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen Limited has no effect on the direction of Fact i.e., Fact and Appen go up and down completely randomly.

Pair Corralation between Fact and Appen

If you would invest  0.01  in Fact Inc on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Fact Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fact Inc  vs.  Appen Limited

Fact Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fact Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fact is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Appen Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Appen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fact and Appen

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

The idea behind Fact Inc and Appen Limited 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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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.