Correlation Between High Wire and Appen

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

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

Diversification Opportunities for High Wire and Appen

0.31

Correlation Coefficient

High Wire  Appen

Weak diversification

The 3 months correlation between High and Appen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding High Wire Networks and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and High Wire 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 High Wire Networks 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 High Wire i.e., High Wire and Appen go up and down completely randomly.

Pair Corralation between High Wire and Appen

Given the investment horizon of 90 days High Wire Networks is expected to under-perform the Appen. In addition to that, High Wire is 1.31 times more volatile than Appen Limited. It trades about -0.06 of its total potential returns per unit of risk. Appen Limited is currently generating about -0.05 per unit of volatility. If you would invest  66.00  in Appen Limited on December 19, 2024 and sell it today you would lose (26.00) from holding Appen Limited or give up 39.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

High Wire Networks  vs.  Appen Limited

High Wire Networks

Risk-Adjusted Performance

Very Weak

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

Appen Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appen Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic 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 High Wire and Appen

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

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.