Correlation Between Appen and Flywire Corp

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

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

Diversification Opportunities for Appen and Flywire Corp

-0.83

Correlation Coefficient

Appen  Flywire Corp

Pay attention - limited upside

The 3 months correlation between Appen and Flywire is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Flywire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flywire Corp and Appen 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 Appen Limited are associated (or correlated) with Flywire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flywire Corp has no effect on the direction of Appen i.e., Appen and Flywire Corp go up and down completely randomly.

Pair Corralation between Appen and Flywire Corp

Assuming the 90 days horizon Appen Limited is expected to generate 3.34 times more return on investment than Flywire Corp. However, Appen is 3.34 times more volatile than Flywire Corp. It trades about 0.21 of its potential returns per unit of risk. Flywire Corp is currently generating about -0.11 per unit of risk. If you would invest  82.00  in Appen Limited on July 18, 2024 and sell it today you would earn a total of  28.00  from holding Appen Limited or generate 34.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Appen Limited  vs.  Flywire Corp

Appen Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Appen reported solid returns over the last few months and may actually be approaching a breakup point.

Flywire Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flywire Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Flywire Corp is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Appen and Flywire Corp

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

The idea behind Appen Limited and Flywire Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.