Correlation Between Exela Technologies and Applovin Corp

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

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

Diversification Opportunities for Exela Technologies and Applovin Corp

-0.77

Correlation Coefficient

Exela Technologies  Applovin Corp

Pay attention - limited upside

The 3 months correlation between Exela and Applovin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Applovin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applovin Corp and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Applovin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applovin Corp has no effect on the direction of Exela Technologies i.e., Exela Technologies and Applovin Corp go up and down completely randomly.

Pair Corralation between Exela Technologies and Applovin Corp

Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Applovin Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Exela Technologies Preferred is 1.11 times less risky than Applovin Corp. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Applovin Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  8,813  in Applovin Corp on September 2, 2024 and sell it today you would earn a total of  24,862  from holding Applovin Corp or generate 282.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.25%
Values	Daily Returns

Exela Technologies Preferred  vs.  Applovin Corp

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Applovin Corp

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and Applovin Corp

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

The idea behind Exela Technologies Preferred and Applovin Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.