Correlation Between CSE Global and Appen
Can any of the company-specific risk be diversified away by investing in both CSE Global 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 CSE Global and Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSE Global Limited and Appen Limited, you can compare the effects of market volatilities on CSE Global 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 CSE Global with a short position of Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSE Global and Appen.
Diversification Opportunities for CSE Global and Appen
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSE and Appen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and CSE Global 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 CSE Global Limited 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 Limited has no effect on the direction of CSE Global i.e., CSE Global and Appen go up and down completely randomly.
Pair Corralation between CSE Global and Appen
Assuming the 90 days horizon CSE Global is expected to generate 1.1 times less return on investment than Appen. But when comparing it to its historical volatility, CSE Global Limited is 4.54 times less risky than Appen. It trades about 0.15 of its potential returns per unit of risk. Appen Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Appen Limited on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Appen Limited or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSE Global Limited vs. Appen Limited
Performance |
| Timeline |
| CSE Global Limited |
| Appen Limited |
CSE Global and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSE Global and Appen
The main advantage of trading using opposite CSE Global and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSE Global 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.| CSE Global vs. Accenture plc | CSE Global vs. International Business Machines | CSE Global vs. Infosys Ltd ADR | CSE Global vs. Fidelity National Information |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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