Correlation Between Puration and Appswarm

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

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

Diversification Opportunities for Puration and Appswarm

0.0

Correlation Coefficient

Puration  Appswarm

Pay attention - limited upside

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

Pair Corralation between Puration and Appswarm

If you would invest  0.03  in Appswarm on September 27, 2024 and sell it today you would lose (0.01) from holding Appswarm or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Puration  vs.  Appswarm

Puration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Puration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Appswarm

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Appswarm are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Appswarm displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Puration and Appswarm

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

The idea behind Puration and Appswarm 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 Global Correlations module to find global opportunities by holding instruments from different markets.