Correlation Between Fobi AI and AppTech Payments

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

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

Diversification Opportunities for Fobi AI and AppTech Payments

0.14

Correlation Coefficient

Fobi AI  AppTech Payments

Average diversification

The 3 months correlation between Fobi and AppTech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fobi AI and AppTech Payments Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppTech Payments Corp and Fobi AI 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 Fobi AI are associated (or correlated) with AppTech Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppTech Payments Corp has no effect on the direction of Fobi AI i.e., Fobi AI and AppTech Payments go up and down completely randomly.

Pair Corralation between Fobi AI and AppTech Payments

Assuming the 90 days horizon Fobi AI is expected to generate 5.96 times more return on investment than AppTech Payments. However, Fobi AI is 5.96 times more volatile than AppTech Payments Corp. It trades about 0.14 of its potential returns per unit of risk. AppTech Payments Corp is currently generating about 0.05 per unit of risk. If you would invest  2.00  in Fobi AI on December 26, 2024 and sell it today you would lose (0.89) from holding Fobi AI or give up 44.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

Fobi AI  vs.  AppTech Payments Corp

Fobi AI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fobi AI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Fobi AI reported solid returns over the last few months and may actually be approaching a breakup point.

AppTech Payments Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AppTech Payments Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AppTech Payments showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fobi AI and AppTech Payments

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

The idea behind Fobi AI and AppTech Payments Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.