Correlation Between Appen and Soluna Holdings
Can any of the company-specific risk be diversified away by investing in both Appen and Soluna Holdings 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 Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and Soluna Holdings Preferred, you can compare the effects of market volatilities on Appen and Soluna Holdings 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 Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and Soluna Holdings.
Diversification Opportunities for Appen and Soluna Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Appen and Soluna is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred 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 Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings Preferred has no effect on the direction of Appen i.e., Appen and Soluna Holdings go up and down completely randomly.
Pair Corralation between Appen and Soluna Holdings
Assuming the 90 days horizon Appen Limited is expected to generate 2.97 times more return on investment than Soluna Holdings. However, Appen is 2.97 times more volatile than Soluna Holdings Preferred. It trades about 0.09 of its potential returns per unit of risk. Soluna Holdings Preferred is currently generating about 0.11 per unit of risk. If you would invest 29.00 in Appen Limited on August 26, 2024 and sell it today you would earn a total of 50.00 from holding Appen Limited or generate 172.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appen Limited vs. Soluna Holdings Preferred
Performance |
| Timeline |
| Appen Limited |
| Soluna Holdings Preferred |
Appen and Soluna Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and Soluna Holdings
The main advantage of trading using opposite Appen and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, Soluna Holdings 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 Soluna Holdings will offset losses from the drop in Soluna Holdings' long position.| Appen vs. Atos Origin SA | Appen vs. Aurora Innovation | Appen vs. Appen Limited | Appen vs. Direct Communication Solutions |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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