Correlation Between Flint Telecom and Appen

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

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

Diversification Opportunities for Flint Telecom and Appen

-0.16

Correlation Coefficient

Flint Telecom  Appen

Good diversification

The 3 months correlation between Flint and Appen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Flint Telecom Group and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Flint Telecom 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 Flint Telecom Group 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 Flint Telecom i.e., Flint Telecom and Appen go up and down completely randomly.

Pair Corralation between Flint Telecom and Appen

Given the investment horizon of 90 days Flint Telecom Group is expected to generate 3.44 times more return on investment than Appen. However, Flint Telecom is 3.44 times more volatile than Appen Limited. It trades about 0.22 of its potential returns per unit of risk. Appen Limited is currently generating about -0.06 per unit of risk. If you would invest  102.00  in Flint Telecom Group on October 10, 2024 and sell it today you would earn a total of  47.00  from holding Flint Telecom Group or generate 46.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Flint Telecom Group  vs.  Appen Limited

Flint Telecom Group

Risk-Adjusted Performance

6 of 100

Modest

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

Appen Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 6 (%) 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.

Pair Trading with Flint Telecom and Appen

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

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.