Correlation Between Appen and CSE Global
Can any of the company-specific risk be diversified away by investing in both Appen and CSE Global 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 CSE Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and CSE Global Limited, you can compare the effects of market volatilities on Appen and CSE Global 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 CSE Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and CSE Global.
Diversification Opportunities for Appen and CSE Global
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Appen and CSE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and CSE Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSE Global Limited 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 CSE Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSE Global Limited has no effect on the direction of Appen i.e., Appen and CSE Global go up and down completely randomly.
Pair Corralation between Appen and CSE Global
Assuming the 90 days horizon Appen Limited is expected to generate 2.13 times more return on investment than CSE Global. However, Appen is 2.13 times more volatile than CSE Global Limited. It trades about 0.04 of its potential returns per unit of risk. CSE Global Limited is currently generating about 0.03 per unit of risk. If you would invest 184.00 in Appen Limited on October 25, 2024 and sell it today you would lose (30.00) from holding Appen Limited or give up 16.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.93% |
| Values | Daily Returns |
Appen Limited vs. CSE Global Limited
Performance |
| Timeline |
| Appen Limited |
| CSE Global Limited |
Appen and CSE Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and CSE Global
The main advantage of trading using opposite Appen and CSE Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, CSE Global 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 CSE Global will offset losses from the drop in CSE Global's long position.| Appen vs. Appen Limited | Appen vs. Direct Communication Solutions | Appen vs. Capgemini SE ADR | Appen vs. Quisitive Technology Solutions |
| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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