Correlation Between Atos SE and Appen

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

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

Diversification Opportunities for Atos SE and Appen

-0.77

Correlation Coefficient

Atos SE  Appen

Pay attention - limited upside

The 3 months correlation between Atos and Appen is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Atos SE and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Atos SE 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 Atos SE 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 Atos SE i.e., Atos SE and Appen go up and down completely randomly.

Pair Corralation between Atos SE and Appen

Assuming the 90 days horizon Atos SE is expected to generate 1.67 times more return on investment than Appen. However, Atos SE is 1.67 times more volatile than Appen Limited. It trades about 0.06 of its potential returns per unit of risk. Appen Limited is currently generating about -0.12 per unit of risk. If you would invest  0.38  in Atos SE on December 28, 2024 and sell it today you would earn a total of  0.02  from holding Atos SE or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Atos SE  vs.  Appen Limited

Atos SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Atos SE reported solid returns over the last few months and may actually be approaching a breakup point.

Appen Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appen Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Atos SE and Appen

The main advantage of trading using opposite Atos SE and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atos SE 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.

The idea behind Atos SE and Appen Limited 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.