Correlation Between Value Exchange and Appen

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

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

Diversification Opportunities for Value Exchange and Appen

0.81

Correlation Coefficient

Value Exchange  Appen

Very poor diversification

The 3 months correlation between Value and Appen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Value Exchange International and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and Value Exchange 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 Value Exchange International are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen Limited has no effect on the direction of Value Exchange i.e., Value Exchange and Appen go up and down completely randomly.

Pair Corralation between Value Exchange and Appen

Given the investment horizon of 90 days Value Exchange International is expected to under-perform the Appen. But the otc stock apears to be less risky and, when comparing its historical volatility, Value Exchange International is 16.35 times less risky than Appen. The otc stock trades about -0.22 of its potential returns per unit of risk. The Appen Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Appen Limited on February 4, 2025 and sell it today you would lose (7.00) from holding Appen Limited or give up 21.21% of portfolio value over 90 days.

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

Value Exchange International  vs.  Appen Limited

Value Exchange Inter

Risk-Adjusted Performance

Very Weak

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

Appen Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appen Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Value Exchange and Appen

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

The idea behind Value Exchange International and Appen Limited 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.