Correlation Between Taoping and AppTech Payments
Can any of the company-specific risk be diversified away by investing in both Taoping and AppTech Payments 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 Taoping and AppTech Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taoping and AppTech Payments Corp, you can compare the effects of market volatilities on Taoping and AppTech Payments 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 Taoping with a short position of AppTech Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taoping and AppTech Payments.
Diversification Opportunities for Taoping and AppTech Payments
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taoping and AppTech is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Taoping and AppTech Payments Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppTech Payments Corp and Taoping 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 Taoping are associated (or correlated) with AppTech Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppTech Payments Corp has no effect on the direction of Taoping i.e., Taoping and AppTech Payments go up and down completely randomly.
Pair Corralation between Taoping and AppTech Payments
Given the investment horizon of 90 days Taoping is expected to under-perform the AppTech Payments. But the stock apears to be less risky and, when comparing its historical volatility, Taoping is 14.98 times less risky than AppTech Payments. The stock trades about -0.06 of its potential returns per unit of risk. The AppTech Payments Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 54.00 in AppTech Payments Corp on November 3, 2024 and sell it today you would lose (34.99) from holding AppTech Payments Corp or give up 64.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.44% |
| Values | Daily Returns |
Taoping vs. AppTech Payments Corp
Performance |
| Timeline |
| Taoping |
| AppTech Payments Corp |
Taoping and AppTech Payments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taoping and AppTech Payments
The main advantage of trading using opposite Taoping and AppTech Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taoping position performs unexpectedly, AppTech Payments 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 Payments will offset losses from the drop in AppTech Payments' long position.| Taoping vs. TonnerOne World Holdings | Taoping vs. Global Blue Group | Taoping vs. Bridgeline Digital | Taoping vs. Cerberus Cyber Sentinel |
| AppTech Payments vs. American Rebel Holdings | AppTech Payments vs. bioAffinity Technologies Warrant | AppTech Payments vs. TC BioPharm plc | AppTech Payments vs. NextNav Warrant |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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