Correlation Between Appfolio and Treace Medical

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

By analyzing existing cross correlation between Appfolio and Treace Medical Concepts, you can compare the effects of market volatilities on Appfolio and Treace Medical 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 Treace Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appfolio and Treace Medical.

Diversification Opportunities for Appfolio and Treace Medical

-0.51

Correlation Coefficient

Appfolio  Treace Medical

Excellent diversification

The 3 months correlation between Appfolio and Treace is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Appfolio and Treace Medical Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treace Medical Concepts 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 Treace Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treace Medical Concepts has no effect on the direction of Appfolio i.e., Appfolio and Treace Medical go up and down completely randomly.

Pair Corralation between Appfolio and Treace Medical

Given the investment horizon of 90 days Appfolio is expected to generate 0.99 times more return on investment than Treace Medical. However, Appfolio is 1.01 times less risky than Treace Medical. It trades about 0.23 of its potential returns per unit of risk. Treace Medical Concepts is currently generating about -0.15 per unit of risk. If you would invest  21,434  in Appfolio on May 4, 2025 and sell it today you would earn a total of  10,481  from holding Appfolio or generate 48.9% return on investment over 90 days.

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

Appfolio  vs.  Treace Medical Concepts

Appfolio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Appfolio are ranked lower than 18 (%) 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.

Treace Medical Concepts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treace Medical Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Appfolio and Treace Medical

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

The idea behind Appfolio and Treace Medical Concepts 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.