Correlation Between Appen and Crypto
Can any of the company-specific risk be diversified away by investing in both Appen and Crypto 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 Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and Crypto Co, you can compare the effects of market volatilities on Appen and Crypto 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 Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and Crypto.
Diversification Opportunities for Appen and Crypto
Very good diversification
The 3 months correlation between Appen and Crypto is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto 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 Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of Appen i.e., Appen and Crypto go up and down completely randomly.
Pair Corralation between Appen and Crypto
Assuming the 90 days horizon Appen Limited is expected to under-perform the Crypto. But the pink sheet apears to be less risky and, when comparing its historical volatility, Appen Limited is 2.62 times less risky than Crypto. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Crypto Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Crypto Co on November 4, 2024 and sell it today you would lose (0.03) from holding Crypto Co or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appen Limited vs. Crypto Co
Performance |
| Timeline |
| Appen Limited |
| Crypto |
Appen and Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and Crypto
The main advantage of trading using opposite Appen and Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, Crypto 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 Crypto will offset losses from the drop in Crypto's long position.| Appen vs. Atos Origin SA | Appen vs. Aurora Innovation | Appen vs. Appen Limited | Appen vs. Direct Communication Solutions |
| Crypto vs. Direct Communication Solutions | Crypto vs. Datametrex AI Limited | Crypto vs. CSE Global Limited | Crypto vs. Appen Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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