Correlation Between Cloudflare and Apptech Corp

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

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

Diversification Opportunities for Cloudflare and Apptech Corp

-0.76

Correlation Coefficient

Cloudflare  Apptech Corp

Pay attention - limited upside

The 3 months correlation between Cloudflare and Apptech is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Apptech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apptech Corp and Cloudflare 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 Cloudflare are associated (or correlated) with Apptech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apptech Corp has no effect on the direction of Cloudflare i.e., Cloudflare and Apptech Corp go up and down completely randomly.

Pair Corralation between Cloudflare and Apptech Corp

If you would invest  18,387  in Cloudflare on April 22, 2025 and sell it today you would earn a total of  1,348  from holding Cloudflare or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Cloudflare  vs.  Apptech Corp

Cloudflare

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cloudflare are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Cloudflare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Apptech Corp

Risk-Adjusted Performance

Modest

Over the last 90 days Apptech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cloudflare and Apptech Corp

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

The idea behind Cloudflare and Apptech 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.