Correlation Between Appian Corp and Birks
Can any of the company-specific risk be diversified away by investing in both Appian Corp and Birks 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 Appian Corp and Birks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appian Corp and Birks Group, you can compare the effects of market volatilities on Appian Corp and Birks 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 Appian Corp with a short position of Birks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appian Corp and Birks.
Diversification Opportunities for Appian Corp and Birks
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Appian and Birks is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group and Appian Corp 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 Appian Corp are associated (or correlated) with Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of Appian Corp i.e., Appian Corp and Birks go up and down completely randomly.
Pair Corralation between Appian Corp and Birks
Given the investment horizon of 90 days Appian Corp is expected to generate 0.92 times more return on investment than Birks. However, Appian Corp is 1.09 times less risky than Birks. It trades about 0.02 of its potential returns per unit of risk. Birks Group is currently generating about -0.07 per unit of risk. If you would invest 3,661 in Appian Corp on September 5, 2024 and sell it today you would earn a total of 200.00 from holding Appian Corp or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appian Corp vs. Birks Group
Performance |
| Timeline |
| Appian Corp |
| Birks Group |
Appian Corp and Birks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appian Corp and Birks
The main advantage of trading using opposite Appian Corp and Birks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp position performs unexpectedly, Birks 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 Birks will offset losses from the drop in Birks' long position.The idea behind Appian Corp and Birks Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |