Correlation Between Appfolio and HealthEquity
Can any of the company-specific risk be diversified away by investing in both Appfolio and HealthEquity 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 Appfolio and HealthEquity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appfolio and HealthEquity, you can compare the effects of market volatilities on Appfolio and HealthEquity 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 Appfolio with a short position of HealthEquity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appfolio and HealthEquity.
Diversification Opportunities for Appfolio and HealthEquity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Appfolio and HealthEquity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Appfolio and HealthEquity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthEquity and Appfolio 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 Appfolio are associated (or correlated) with HealthEquity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthEquity has no effect on the direction of Appfolio i.e., Appfolio and HealthEquity go up and down completely randomly.
Pair Corralation between Appfolio and HealthEquity
Given the investment horizon of 90 days Appfolio is expected to generate 1.06 times more return on investment than HealthEquity. However, Appfolio is 1.06 times more volatile than HealthEquity. It trades about 0.37 of its potential returns per unit of risk. HealthEquity is currently generating about 0.3 per unit of risk. If you would invest 19,207 in Appfolio on August 25, 2024 and sell it today you would earn a total of 5,032 from holding Appfolio or generate 26.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appfolio vs. HealthEquity
Performance |
| Timeline |
| Appfolio |
| HealthEquity |
Appfolio and HealthEquity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appfolio and HealthEquity
The main advantage of trading using opposite Appfolio and HealthEquity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appfolio position performs unexpectedly, HealthEquity 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 HealthEquity will offset losses from the drop in HealthEquity's long position.The idea behind Appfolio and HealthEquity 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.| HealthEquity vs. Ollies Bargain Outlet | HealthEquity vs. Appfolio | HealthEquity vs. Grand Canyon Education | HealthEquity vs. Globus Medical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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