Correlation Between Appfolio and Model N
Can any of the company-specific risk be diversified away by investing in both Appfolio and Model N 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 Model N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appfolio and Model N, you can compare the effects of market volatilities on Appfolio and Model N 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 Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appfolio and Model N.
Diversification Opportunities for Appfolio and Model N
Very good diversification
The 3 months correlation between Appfolio and Model is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Appfolio and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N 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 Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Appfolio i.e., Appfolio and Model N go up and down completely randomly.
Pair Corralation between Appfolio and Model N
Given the investment horizon of 90 days Appfolio is expected to generate 1.56 times less return on investment than Model N. In addition to that, Appfolio is 1.5 times more volatile than Model N. It trades about 0.04 of its total potential returns per unit of risk. Model N is currently generating about 0.1 per unit of volatility. If you would invest 2,310 in Model N on August 24, 2024 and sell it today you would earn a total of 690.00 from holding Model N or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.4% |
| Values | Daily Returns |
Appfolio vs. Model N
Performance |
| Timeline |
| Appfolio |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Appfolio and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appfolio and Model N
The main advantage of trading using opposite Appfolio and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appfolio position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.The idea behind Appfolio and Model N 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.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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