Correlation Between Hackett and Appen
Can any of the company-specific risk be diversified away by investing in both Hackett 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 Hackett and Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hackett Group and Appen Limited, you can compare the effects of market volatilities on Hackett 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 Hackett with a short position of Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and Appen.
Diversification Opportunities for Hackett and Appen
Modest diversification
The 3 months correlation between Hackett and Appen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Hackett 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 The Hackett Group 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 Hackett i.e., Hackett and Appen go up and down completely randomly.
Pair Corralation between Hackett and Appen
Given the investment horizon of 90 days Hackett is expected to generate 13.91 times less return on investment than Appen. But when comparing it to its historical volatility, The Hackett Group is 10.06 times less risky than Appen. It trades about 0.05 of its potential returns per unit of risk. Appen Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 |
The Hackett Group vs. Appen Limited
Performance |
| Timeline |
| Hackett Group |
| Appen Limited |
Hackett and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and Appen
The main advantage of trading using opposite Hackett and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett 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.| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |