Correlation Between Apptech Corp and Technology Munications

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

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

Diversification Opportunities for Apptech Corp and Technology Munications

-0.35

Correlation Coefficient

Apptech Corp  Technology Munications

Very good diversification

The 3 months correlation between Apptech and Technology is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp and Technology Munications Portfol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Munications 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 Technology Munications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Munications has no effect on the direction of Apptech Corp i.e., Apptech Corp and Technology Munications go up and down completely randomly.

Pair Corralation between Apptech Corp and Technology Munications

Given the investment horizon of 90 days Apptech Corp is expected to generate 28.92 times more return on investment than Technology Munications. However, Apptech Corp is 28.92 times more volatile than Technology Munications Portfolio. It trades about 0.09 of its potential returns per unit of risk. Technology Munications Portfolio is currently generating about 0.42 per unit of risk. If you would invest  37.00  in Apptech Corp on April 20, 2025 and sell it today you would lose (7.00) from holding Apptech Corp or give up 18.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.38%
Values	Daily Returns

Apptech Corp  vs.  Technology Munications Portfol

Apptech Corp

Risk-Adjusted Performance

OK

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.

Technology Munications

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Munications Portfolio are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Technology Munications showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apptech Corp and Technology Munications

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

The idea behind Apptech Corp and Technology Munications Portfolio 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.