Correlation Between Champion Iron and Appen
Can any of the company-specific risk be diversified away by investing in both Champion Iron and Appen 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 Champion Iron and Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Appen, you can compare the effects of market volatilities on Champion Iron and Appen 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 Champion Iron with a short position of Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Appen.
Diversification Opportunities for Champion Iron and Appen
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Champion and Appen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Appen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen and Champion Iron 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 Champion Iron are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen has no effect on the direction of Champion Iron i.e., Champion Iron and Appen go up and down completely randomly.
Pair Corralation between Champion Iron and Appen
Assuming the 90 days trading horizon Champion Iron is expected to generate 2.82 times less return on investment than Appen. But when comparing it to its historical volatility, Champion Iron is 1.91 times less risky than Appen. It trades about 0.09 of its potential returns per unit of risk. Appen is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Appen on September 12, 2024 and sell it today you would earn a total of 67.00 from holding Appen or generate 44.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Appen
Performance |
| Timeline |
| Champion Iron |
| Appen |
Champion Iron and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Appen
The main advantage of trading using opposite Champion Iron and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, Appen 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 Appen will offset losses from the drop in Appen's long position.| Champion Iron vs. Apiam Animal Health | Champion Iron vs. Group 6 Metals | Champion Iron vs. Black Rock Mining | Champion Iron vs. Sonic Healthcare |
| Appen vs. WiseTech Global Limited | Appen vs. Farm Pride Foods | Appen vs. MetalsGrove Mining | Appen vs. Black Rock Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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