Correlation Between AB International and AppYea

Can any of the company-specific risk be diversified away by investing in both AB International and AppYea 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 AB International and AppYea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AB International Group and AppYea Inc, you can compare the effects of market volatilities on AB International and AppYea 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 AB International with a short position of AppYea. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB International and AppYea.

Diversification Opportunities for AB International and AppYea

-0.23

Correlation Coefficient

AB International  AppYea

Very good diversification

The 3 months correlation between ABQQ and AppYea is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding AB International Group and AppYea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppYea Inc and AB International 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 AB International Group are associated (or correlated) with AppYea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppYea Inc has no effect on the direction of AB International i.e., AB International and AppYea go up and down completely randomly.

Pair Corralation between AB International and AppYea

Given the investment horizon of 90 days AB International is expected to generate 2.58 times less return on investment than AppYea. In addition to that, AB International is 2.02 times more volatile than AppYea Inc. It trades about 0.02 of its total potential returns per unit of risk. AppYea Inc is currently generating about 0.09 per unit of volatility. If you would invest  1.13  in AppYea Inc on December 28, 2024 and sell it today you would earn a total of  0.25  from holding AppYea Inc or generate 22.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

AB International Group  vs.  AppYea Inc

AB International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AB International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, AB International reported solid returns over the last few months and may actually be approaching a breakup point.

AppYea Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AppYea Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AppYea reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AB International and AppYea

The main advantage of trading using opposite AB International and AppYea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB International position performs unexpectedly, AppYea 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 AppYea will offset losses from the drop in AppYea's long position.

The idea behind AB International Group and AppYea Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.