Correlation Between Apptech Corp and Mfs Technology

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

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

Diversification Opportunities for Apptech Corp and Mfs Technology

-0.7

Correlation Coefficient

Apptech Corp  Mfs Technology

Excellent diversification

The 3 months correlation between Apptech and Mfs is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Apptech Corp 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 Apptech Corp are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Apptech Corp i.e., Apptech Corp and Mfs Technology go up and down completely randomly.

Pair Corralation between Apptech Corp and Mfs Technology

Given the investment horizon of 90 days Apptech Corp is expected to generate 27.7 times more return on investment than Mfs Technology. However, Apptech Corp is 27.7 times more volatile than Mfs Technology Fund. It trades about 0.08 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.38 per unit of risk. If you would invest  42.00  in Apptech Corp on April 22, 2025 and sell it today you would lose (12.00) from holding Apptech Corp or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	51.61%
Values	Daily Returns

Apptech Corp  vs.  Mfs Technology Fund

Apptech Corp

Risk-Adjusted Performance

Modest

Over the last 90 days Apptech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Mfs Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Technology Fund are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Mfs Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apptech Corp and Mfs Technology

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

The idea behind Apptech Corp and Mfs Technology Fund 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.