Correlation Between Appian Corp and Shoe Carnival
Can any of the company-specific risk be diversified away by investing in both Appian Corp and Shoe Carnival 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 Shoe Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appian Corp and Shoe Carnival, you can compare the effects of market volatilities on Appian Corp and Shoe Carnival 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 Shoe Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appian Corp and Shoe Carnival.
Diversification Opportunities for Appian Corp and Shoe Carnival
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Appian and Shoe is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of Appian Corp i.e., Appian Corp and Shoe Carnival go up and down completely randomly.
Pair Corralation between Appian Corp and Shoe Carnival
Given the investment horizon of 90 days Appian Corp is expected to generate 1.14 times more return on investment than Shoe Carnival. However, Appian Corp is 1.14 times more volatile than Shoe Carnival. It trades about 0.11 of its potential returns per unit of risk. Shoe Carnival is currently generating about 0.0 per unit of risk. If you would invest 2,738 in Appian Corp on September 5, 2024 and sell it today you would earn a total of 1,123 from holding Appian Corp or generate 41.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appian Corp vs. Shoe Carnival
Performance |
| Timeline |
| Appian Corp |
| Shoe Carnival |
Appian Corp and Shoe Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appian Corp and Shoe Carnival
The main advantage of trading using opposite Appian Corp and Shoe Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp position performs unexpectedly, Shoe Carnival 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 Shoe Carnival will offset losses from the drop in Shoe Carnival's long position.The idea behind Appian Corp and Shoe Carnival 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.| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |