Correlation Between ADEIA P and Appfolio

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

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

Diversification Opportunities for ADEIA P and Appfolio

0.56

Correlation Coefficient

ADEIA P  Appfolio

Very weak diversification

The 3 months correlation between ADEIA and Appfolio is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ADEIA P and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and ADEIA P 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 ADEIA P are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of ADEIA P i.e., ADEIA P and Appfolio go up and down completely randomly.

Pair Corralation between ADEIA P and Appfolio

Given the investment horizon of 90 days ADEIA P is expected to generate 3.53 times less return on investment than Appfolio. In addition to that, ADEIA P is 1.24 times more volatile than Appfolio. It trades about 0.05 of its total potential returns per unit of risk. Appfolio is currently generating about 0.22 per unit of volatility. If you would invest  21,434  in Appfolio on May 3, 2025 and sell it today you would earn a total of  5,304  from holding Appfolio or generate 24.75% return on investment over 90 days.

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

ADEIA P  vs.  Appfolio

ADEIA P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, ADEIA P may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Appfolio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Appfolio are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Appfolio reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADEIA P and Appfolio

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

The idea behind ADEIA P and Appfolio 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.