Correlation Between Appen and Trustcash Holdings

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

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

Diversification Opportunities for Appen and Trustcash Holdings

-0.75

Correlation Coefficient

Appen  Trustcash Holdings

Pay attention - limited upside

The 3 months correlation between Appen and Trustcash is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash Holdings and Appen 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 Appen Limited are associated (or correlated) with Trustcash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustcash Holdings has no effect on the direction of Appen i.e., Appen and Trustcash Holdings go up and down completely randomly.

Pair Corralation between Appen and Trustcash Holdings

Assuming the 90 days horizon Appen Limited is expected to generate 1.29 times more return on investment than Trustcash Holdings. However, Appen is 1.29 times more volatile than Trustcash Holdings. It trades about 0.17 of its potential returns per unit of risk. Trustcash Holdings is currently generating about -0.13 per unit of risk. If you would invest  49.00  in Appen Limited on September 3, 2024 and sell it today you would earn a total of  103.00  from holding Appen Limited or generate 210.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Appen Limited  vs.  Trustcash Holdings

Appen Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Appen reported solid returns over the last few months and may actually be approaching a breakup point.

Trustcash Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trustcash Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Appen and Trustcash Holdings

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

The idea behind Appen Limited and Trustcash Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.