Correlation Between Appen and AMREP
Can any of the company-specific risk be diversified away by investing in both Appen and AMREP 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 Appen and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and AMREP, you can compare the effects of market volatilities on Appen and AMREP 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 Appen with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and AMREP.
Diversification Opportunities for Appen and AMREP
Very poor diversification
The 3 months correlation between Appen and AMREP is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Appen 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 Appen Limited are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Appen i.e., Appen and AMREP go up and down completely randomly.
Pair Corralation between Appen and AMREP
Assuming the 90 days horizon Appen Limited is expected to generate 4.46 times more return on investment than AMREP. However, Appen is 4.46 times more volatile than AMREP. It trades about 0.1 of its potential returns per unit of risk. AMREP is currently generating about 0.18 per unit of risk. If you would invest 110.00 in Appen Limited on September 5, 2024 and sell it today you would earn a total of 42.00 from holding Appen Limited or generate 38.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Appen Limited vs. AMREP
Performance |
| Timeline |
| Appen Limited |
| AMREP |
Appen and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and AMREP
The main advantage of trading using opposite Appen and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.| Appen vs. Appen Limited | Appen vs. Direct Communication Solutions | Appen vs. Capgemini SE ADR | Appen vs. Quisitive Technology Solutions |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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