Correlation Between IDEX Biometrics and Appfolio

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

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

Diversification Opportunities for IDEX Biometrics and Appfolio

0.0

Correlation Coefficient

IDEX Biometrics  Appfolio

Pay attention - limited upside

The 3 months correlation between IDEX and Appfolio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IDEX Biometrics ASA and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and IDEX Biometrics 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 IDEX Biometrics ASA are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of IDEX Biometrics i.e., IDEX Biometrics and Appfolio go up and down completely randomly.

Pair Corralation between IDEX Biometrics and Appfolio

If you would invest (100.00) in IDEX Biometrics ASA on December 29, 2024 and sell it today you would earn a total of  100.00  from holding IDEX Biometrics ASA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IDEX Biometrics ASA  vs.  Appfolio

IDEX Biometrics ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX Biometrics ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IDEX Biometrics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Appfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with IDEX Biometrics and Appfolio

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

The idea behind IDEX Biometrics ASA and Appfolio 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.