Correlation Between Optiva and Apptech Corp

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

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

Diversification Opportunities for Optiva and Apptech Corp

-0.36

Correlation Coefficient

Optiva  Apptech Corp

Very good diversification

The 3 months correlation between Optiva and Apptech is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Optiva Inc and Apptech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apptech Corp and Optiva 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 Optiva Inc 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 Optiva i.e., Optiva and Apptech Corp go up and down completely randomly.

Pair Corralation between Optiva and Apptech Corp

Assuming the 90 days horizon Optiva Inc is expected to generate 1.69 times more return on investment than Apptech Corp. However, Optiva is 1.69 times more volatile than Apptech Corp. It trades about -0.02 of its potential returns per unit of risk. Apptech Corp is currently generating about -0.07 per unit of risk. If you would invest  215.00  in Optiva Inc on December 30, 2024 and sell it today you would lose (93.00) from holding Optiva Inc or give up 43.26% of portfolio value over 90 days.

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

Optiva Inc  vs.  Apptech Corp

Optiva Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Optiva Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Optiva and Apptech Corp

The main advantage of trading using opposite Optiva and Apptech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optiva 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 Optiva Inc 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.