Correlation Between Appfolio and Absolute Software

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

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

Diversification Opportunities for Appfolio and Absolute Software

0.0

Correlation Coefficient

Appfolio  Absolute Software

Pay attention - limited upside

The 3 months correlation between Appfolio and Absolute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Appfolio and Absolute Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Software and Appfolio 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 Appfolio are associated (or correlated) with Absolute Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Software has no effect on the direction of Appfolio i.e., Appfolio and Absolute Software go up and down completely randomly.

Pair Corralation between Appfolio and Absolute Software

If you would invest  0.00  in Absolute Software on February 3, 2025 and sell it today you would earn a total of  0.00  from holding Absolute Software or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Appfolio  vs.  Absolute Software

Appfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Absolute Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Absolute Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Absolute Software is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Appfolio and Absolute Software

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

The idea behind Appfolio and Absolute Software 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.