Correlation Between Verint Systems and Appian Corp

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

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

Diversification Opportunities for Verint Systems and Appian Corp

0.93

Correlation Coefficient

Verint Systems  Appian Corp

Almost no diversification

The 3 months correlation between Verint and Appian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and Verint Systems 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 Verint Systems 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 Verint Systems i.e., Verint Systems and Appian Corp go up and down completely randomly.

Pair Corralation between Verint Systems and Appian Corp

Given the investment horizon of 90 days Verint Systems is expected to under-perform the Appian Corp. In addition to that, Verint Systems is 1.13 times more volatile than Appian Corp. It trades about -0.06 of its total potential returns per unit of risk. Appian Corp is currently generating about -0.02 per unit of volatility. If you would invest  3,101  in Appian Corp on January 18, 2025 and sell it today you would lose (446.00) from holding Appian Corp or give up 14.38% of portfolio value over 90 days.

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

Verint Systems  vs.  Appian Corp

Verint Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verint Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Verint Systems and Appian Corp

The main advantage of trading using opposite Verint Systems and Appian Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verint Systems 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 Verint Systems 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.