Correlation Between Usio and Appen

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

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

Diversification Opportunities for Usio and Appen

0.12

Correlation Coefficient

Usio  Appen

Average diversification

The 3 months correlation between Usio and Appen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Usio 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 Usio 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 Usio i.e., Usio and Appen go up and down completely randomly.

Pair Corralation between Usio and Appen

Given the investment horizon of 90 days Usio is expected to generate 109.52 times less return on investment than Appen. But when comparing it to its historical volatility, Usio Inc is 7.27 times less risky than Appen. It trades about 0.01 of its potential returns per unit of risk. Appen Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Appen Limited on September 1, 2024 and sell it today you would earn a total of  103.00  from holding Appen Limited or generate 210.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Usio Inc  vs.  Appen Limited

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Usio and Appen

The main advantage of trading using opposite Usio and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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 Usio 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.