Correlation Between AppTech Payments and Alarum Technologies
Can any of the company-specific risk be diversified away by investing in both AppTech Payments and Alarum Technologies 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 AppTech Payments and Alarum Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AppTech Payments Corp and Alarum Technologies, you can compare the effects of market volatilities on AppTech Payments and Alarum Technologies 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 AppTech Payments with a short position of Alarum Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AppTech Payments and Alarum Technologies.
Diversification Opportunities for AppTech Payments and Alarum Technologies
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AppTech and Alarum is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AppTech Payments Corp and Alarum Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarum Technologies and AppTech Payments 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 AppTech Payments Corp are associated (or correlated) with Alarum Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarum Technologies has no effect on the direction of AppTech Payments i.e., AppTech Payments and Alarum Technologies go up and down completely randomly.
Pair Corralation between AppTech Payments and Alarum Technologies
Assuming the 90 days horizon AppTech Payments Corp is expected to generate 18.09 times more return on investment than Alarum Technologies. However, AppTech Payments is 18.09 times more volatile than Alarum Technologies. It trades about 0.15 of its potential returns per unit of risk. Alarum Technologies is currently generating about 0.05 per unit of risk. If you would invest 22.00 in AppTech Payments Corp on September 3, 2024 and sell it today you would lose (6.00) from holding AppTech Payments Corp or give up 27.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.44% |
| Values | Daily Returns |
AppTech Payments Corp vs. Alarum Technologies
Performance |
| Timeline |
| AppTech Payments Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Alarum Technologies |
AppTech Payments and Alarum Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AppTech Payments and Alarum Technologies
The main advantage of trading using opposite AppTech Payments and Alarum Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AppTech Payments position performs unexpectedly, Alarum Technologies 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 Alarum Technologies will offset losses from the drop in Alarum Technologies' long position.| AppTech Payments vs. Rapid7 Inc | AppTech Payments vs. CyberArk Software | AppTech Payments vs. Varonis Systems | AppTech Payments vs. Check Point Software |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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