Correlation Between Gen Digital and Apptech Corp
Can any of the company-specific risk be diversified away by investing in both Gen Digital and Apptech Corp 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 Gen Digital and Apptech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen Digital and Apptech Corp, you can compare the effects of market volatilities on Gen Digital and Apptech Corp 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 Gen Digital with a short position of Apptech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and Apptech Corp.
Diversification Opportunities for Gen Digital and Apptech Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gen and Apptech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and Apptech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apptech Corp and Gen Digital 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 Gen Digital are associated (or correlated) with Apptech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apptech Corp has no effect on the direction of Gen Digital i.e., Gen Digital and Apptech Corp go up and down completely randomly.
Pair Corralation between Gen Digital and Apptech Corp
Considering the 90-day investment horizon Gen Digital is expected to generate 2.28 times less return on investment than Apptech Corp. But when comparing it to its historical volatility, Gen Digital is 4.41 times less risky than Apptech Corp. It trades about 0.05 of its potential returns per unit of risk. Apptech Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Apptech Corp on August 28, 2024 and sell it today you would lose (45.00) from holding Apptech Corp or give up 48.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gen Digital vs. Apptech Corp
Performance |
| Timeline |
| Gen Digital |
| Apptech Corp |
Gen Digital and Apptech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen Digital and Apptech Corp
The main advantage of trading using opposite Gen Digital and Apptech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen Digital position performs unexpectedly, Apptech Corp 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 Apptech Corp will offset losses from the drop in Apptech Corp's long position.| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital vs. Global Blue Group |
| Apptech Corp vs. GigaCloud Technology Class | Apptech Corp vs. Arqit Quantum | Apptech Corp vs. Telos Corp | Apptech Corp vs. Cemtrex |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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