Correlation Between Femto Technologies and Appian Corp

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

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

Diversification Opportunities for Femto Technologies and Appian Corp

0.75

Correlation Coefficient

Femto Technologies  Appian Corp

Poor diversification

The 3 months correlation between Femto and Appian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Femto Technologies and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and Femto Technologies 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 Femto Technologies are associated (or correlated) with Appian Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appian Corp has no effect on the direction of Femto Technologies i.e., Femto Technologies and Appian Corp go up and down completely randomly.

Pair Corralation between Femto Technologies and Appian Corp

Given the investment horizon of 90 days Femto Technologies is expected to generate 14.37 times more return on investment than Appian Corp. However, Femto Technologies is 14.37 times more volatile than Appian Corp. It trades about 0.01 of its potential returns per unit of risk. Appian Corp is currently generating about -0.03 per unit of risk. If you would invest  210,000  in Femto Technologies on January 25, 2025 and sell it today you would lose (209,295) from holding Femto Technologies or give up 99.66% of portfolio value over 90 days.

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

Femto Technologies  vs.  Appian Corp

Femto Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Femto Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Femto Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Appian Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appian Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Femto Technologies and Appian Corp

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

The idea behind Femto Technologies and Appian 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.