Correlation Between Appswarm and KwikClick

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

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

Diversification Opportunities for Appswarm and KwikClick

-0.01

Correlation Coefficient

Appswarm  KwikClick

Good diversification

The 3 months correlation between Appswarm and KwikClick is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Appswarm and KwikClick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KwikClick and Appswarm 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 Appswarm are associated (or correlated) with KwikClick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KwikClick has no effect on the direction of Appswarm i.e., Appswarm and KwikClick go up and down completely randomly.

Pair Corralation between Appswarm and KwikClick

Given the investment horizon of 90 days Appswarm is expected to generate 1.11 times more return on investment than KwikClick. However, Appswarm is 1.11 times more volatile than KwikClick. It trades about 0.11 of its potential returns per unit of risk. KwikClick is currently generating about 0.01 per unit of risk. If you would invest  0.02  in Appswarm on September 8, 2024 and sell it today you would earn a total of  0.01  from holding Appswarm or generate 50.0% return on investment over 90 days.

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

Appswarm  vs.  KwikClick

Appswarm

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Appswarm are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Appswarm displayed solid returns over the last few months and may actually be approaching a breakup point.

KwikClick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KwikClick has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak forward indicators, KwikClick may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Appswarm and KwikClick

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

The idea behind Appswarm and KwikClick 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.