Correlation Between Appen and Premium Beverage

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

By analyzing existing cross correlation between Appen Limited and Premium Beverage Group, you can compare the effects of market volatilities on Appen and Premium Beverage 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 Premium Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and Premium Beverage.

Diversification Opportunities for Appen and Premium Beverage

0.0

Correlation Coefficient

Appen  Premium Beverage

Pay attention - limited upside

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

Pair Corralation between Appen and Premium Beverage

If you would invest  26.00  in Appen Limited on May 6, 2025 and sell it today you would earn a total of  3.00  from holding Appen Limited or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Appen Limited  vs.  Premium Beverage Group

Appen Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Appen Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Appen showed solid returns over the last few months and may actually be approaching a breakup point.

Premium Beverage

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Appen and Premium Beverage

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

The idea behind Appen Limited and Premium Beverage Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.