Correlation Between Visium Technologies and Appen

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

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

Diversification Opportunities for Visium Technologies and Appen

0.2

Correlation Coefficient

Visium Technologies  Appen

Modest diversification

The 3 months correlation between Visium and Appen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Visium Technologies and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Visium Technologies 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 Visium Technologies 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 Visium Technologies i.e., Visium Technologies and Appen go up and down completely randomly.

Pair Corralation between Visium Technologies and Appen

Given the investment horizon of 90 days Visium Technologies is expected to under-perform the Appen. But the pink sheet apears to be less risky and, when comparing its historical volatility, Visium Technologies is 1.21 times less risky than Appen. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Appen Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  56.00  in Appen Limited on September 12, 2024 and sell it today you would earn a total of  96.00  from holding Appen Limited or generate 171.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Visium Technologies  vs.  Appen Limited

Visium Technologies

Risk-Adjusted Performance

8 of 100

Insignificant

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

Appen Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Appen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visium Technologies and Appen

The main advantage of trading using opposite Visium Technologies and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visium Technologies 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 Visium Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.