Correlation Between Goldspot Discoveries and Appen

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

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

Diversification Opportunities for Goldspot Discoveries and Appen

-0.6

Correlation Coefficient

Goldspot Discoveries  Appen

Excellent diversification

The 3 months correlation between Goldspot and Appen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldspot Discoveries Corp and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Goldspot Discoveries 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 Goldspot Discoveries Corp 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 Goldspot Discoveries i.e., Goldspot Discoveries and Appen go up and down completely randomly.

Pair Corralation between Goldspot Discoveries and Appen

Assuming the 90 days horizon Goldspot Discoveries Corp is expected to under-perform the Appen. In addition to that, Goldspot Discoveries is 1.34 times more volatile than Appen Limited. It trades about -0.07 of its total potential returns per unit of risk. Appen Limited is currently generating about -0.06 per unit of volatility. If you would invest  152.00  in Appen Limited on October 12, 2024 and sell it today you would lose (8.00) from holding Appen Limited or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Goldspot Discoveries Corp  vs.  Appen Limited

Goldspot Discoveries Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Appen Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Appen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldspot Discoveries and Appen

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

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.