Correlation Between EPlus and Applovin Corp

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

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

Diversification Opportunities for EPlus and Applovin Corp

-0.37

Correlation Coefficient

EPlus  Applovin Corp

Very good diversification

The 3 months correlation between EPlus and Applovin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Applovin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applovin Corp and EPlus 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 ePlus inc are associated (or correlated) with Applovin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applovin Corp has no effect on the direction of EPlus i.e., EPlus and Applovin Corp go up and down completely randomly.

Pair Corralation between EPlus and Applovin Corp

Given the investment horizon of 90 days ePlus inc is expected to under-perform the Applovin Corp. But the stock apears to be less risky and, when comparing its historical volatility, ePlus inc is 2.34 times less risky than Applovin Corp. The stock trades about -0.31 of its potential returns per unit of risk. The Applovin Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  36,544  in Applovin Corp on December 3, 2024 and sell it today you would lose (3,970) from holding Applovin Corp or give up 10.86% of portfolio value over 90 days.

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

ePlus inc  vs.  Applovin Corp

ePlus inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Applovin Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applovin Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Applovin Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with EPlus and Applovin Corp

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

The idea behind ePlus inc and Applovin 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.