Correlation Between CurrentC Power and Appswarm

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

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

Diversification Opportunities for CurrentC Power and Appswarm

0.57

Correlation Coefficient

CurrentC Power  Appswarm

Very weak diversification

The 3 months correlation between CurrentC and Appswarm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CurrentC Power and Appswarm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appswarm and CurrentC Power 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 CurrentC Power are associated (or correlated) with Appswarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appswarm has no effect on the direction of CurrentC Power i.e., CurrentC Power and Appswarm go up and down completely randomly.

Pair Corralation between CurrentC Power and Appswarm

Given the investment horizon of 90 days CurrentC Power is expected to generate 3.93 times more return on investment than Appswarm. However, CurrentC Power is 3.93 times more volatile than Appswarm. It trades about 0.22 of its potential returns per unit of risk. Appswarm is currently generating about 0.15 per unit of risk. If you would invest  8.60  in CurrentC Power on December 30, 2024 and sell it today you would lose (6.85) from holding CurrentC Power or give up 79.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CurrentC Power  vs.  Appswarm

CurrentC Power

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Appswarm

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Appswarm are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Appswarm displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CurrentC Power and Appswarm

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

The idea behind CurrentC Power and Appswarm 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.