Correlation Between Applovin Corp and Wishpond Technologies

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

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

Diversification Opportunities for Applovin Corp and Wishpond Technologies

-0.79

Correlation Coefficient

Applovin Corp  Wishpond Technologies

Pay attention - limited upside

The 3 months correlation between Applovin and Wishpond is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Applovin Corp and Wishpond Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wishpond Technologies and Applovin Corp 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 Applovin Corp are associated (or correlated) with Wishpond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wishpond Technologies has no effect on the direction of Applovin Corp i.e., Applovin Corp and Wishpond Technologies go up and down completely randomly.

Pair Corralation between Applovin Corp and Wishpond Technologies

Considering the 90-day investment horizon Applovin Corp is expected to generate 1.24 times more return on investment than Wishpond Technologies. However, Applovin Corp is 1.24 times more volatile than Wishpond Technologies. It trades about 0.2 of its potential returns per unit of risk. Wishpond Technologies is currently generating about -0.02 per unit of risk. If you would invest  15,885  in Applovin Corp on October 20, 2024 and sell it today you would earn a total of  18,349  from holding Applovin Corp or generate 115.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Applovin Corp  vs.  Wishpond Technologies

Applovin Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Wishpond Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wishpond Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Applovin Corp and Wishpond Technologies

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

The idea behind Applovin Corp and Wishpond Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.