Correlation Between Shift4 Payments and Apptech Corp

Can any of the company-specific risk be diversified away by investing in both Shift4 Payments and Apptech Corp 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 Shift4 Payments and Apptech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shift4 Payments and Apptech Corp, you can compare the effects of market volatilities on Shift4 Payments and Apptech Corp 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 Shift4 Payments with a short position of Apptech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and Apptech Corp.

Diversification Opportunities for Shift4 Payments and Apptech Corp

0.05

Correlation Coefficient

Shift4 Payments  Apptech Corp

Significant diversification

The 3 months correlation between Shift4 and Apptech is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and Apptech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apptech Corp and Shift4 Payments 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 Shift4 Payments are associated (or correlated) with Apptech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apptech Corp has no effect on the direction of Shift4 Payments i.e., Shift4 Payments and Apptech Corp go up and down completely randomly.

Pair Corralation between Shift4 Payments and Apptech Corp

Given the investment horizon of 90 days Shift4 Payments is expected to generate 0.38 times more return on investment than Apptech Corp. However, Shift4 Payments is 2.65 times less risky than Apptech Corp. It trades about -0.06 of its potential returns per unit of risk. Apptech Corp is currently generating about -0.05 per unit of risk. If you would invest  10,352  in Shift4 Payments on December 20, 2024 and sell it today you would lose (1,527) from holding Shift4 Payments or give up 14.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shift4 Payments  vs.  Apptech Corp

Shift4 Payments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shift4 Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Apptech Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apptech Corp 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 fundamental 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 Shift4 Payments and Apptech Corp

The main advantage of trading using opposite Shift4 Payments and Apptech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments position performs unexpectedly, Apptech Corp 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 Corp will offset losses from the drop in Apptech Corp's long position.

The idea behind Shift4 Payments and Apptech 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.