Correlation Between Castle Biosciences and Appfolio

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

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

Diversification Opportunities for Castle Biosciences and Appfolio

0.09

Correlation Coefficient

Castle Biosciences  Appfolio

Significant diversification

The 3 months correlation between Castle and Appfolio is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and Castle Biosciences 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 Castle Biosciences are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of Castle Biosciences i.e., Castle Biosciences and Appfolio go up and down completely randomly.

Pair Corralation between Castle Biosciences and Appfolio

Given the investment horizon of 90 days Castle Biosciences is expected to under-perform the Appfolio. In addition to that, Castle Biosciences is 1.59 times more volatile than Appfolio. It trades about -0.11 of its total potential returns per unit of risk. Appfolio is currently generating about 0.23 per unit of volatility. If you would invest  20,652  in Appfolio on April 30, 2025 and sell it today you would earn a total of  5,397  from holding Appfolio or generate 26.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Castle Biosciences  vs.  Appfolio

Castle Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castle Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Castle Biosciences and Appfolio

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

The idea behind Castle Biosciences and Appfolio 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.