Correlation Between Sonasoft Corp and Appen

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

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

Diversification Opportunities for Sonasoft Corp and Appen

-0.22

Correlation Coefficient

Sonasoft Corp  Appen

Very good diversification

The 3 months correlation between Sonasoft and Appen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sonasoft Corp and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Sonasoft 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 Sonasoft Corp 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 Sonasoft Corp i.e., Sonasoft Corp and Appen go up and down completely randomly.

Pair Corralation between Sonasoft Corp and Appen

If you would invest  49.00  in Appen Limited on September 22, 2024 and sell it today you would earn a total of  17.00  from holding Appen Limited or generate 34.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Sonasoft Corp  vs.  Appen Limited

Sonasoft Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonasoft Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Sonasoft Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Appen Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Appen showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sonasoft Corp and Appen

The main advantage of trading using opposite Sonasoft Corp and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonasoft Corp 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 Sonasoft Corp 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.