Correlation Between Appen and Hackett
Can any of the company-specific risk be diversified away by investing in both Appen and Hackett 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 Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and The Hackett Group, you can compare the effects of market volatilities on Appen and Hackett 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 Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and Hackett.
Diversification Opportunities for Appen and Hackett
Modest diversification
The 3 months correlation between Appen and Hackett is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group 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 Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of Appen i.e., Appen and Hackett go up and down completely randomly.
Pair Corralation between Appen and Hackett
Assuming the 90 days horizon Appen Limited is expected to generate 10.06 times more return on investment than Hackett. However, Appen is 10.06 times more volatile than The Hackett Group. It trades about 0.06 of its potential returns per unit of risk. The Hackett Group is currently generating about 0.05 per unit of risk. If you would invest 95.00 in Appen Limited on October 25, 2024 and sell it today you would lose (15.00) from holding Appen Limited or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Appen Limited vs. The Hackett Group
Performance |
| Timeline |
| Appen Limited |
| Hackett Group |
Appen and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and Hackett
The main advantage of trading using opposite Appen and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, Hackett 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 Hackett will offset losses from the drop in Hackett's long position.| Appen vs. Atos Origin SA | Appen vs. Aurora Innovation | Appen vs. Appen Limited | Appen vs. Direct Communication Solutions |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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