Correlation Between Alfi and APPTECH CORP

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Can any of the company-specific risk be diversified away by investing in both Alfi 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 Alfi and APPTECH CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfi Inc and APPTECH CORP, you can compare the effects of market volatilities on Alfi 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 Alfi with a short position of APPTECH CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfi and APPTECH CORP.

Diversification Opportunities for Alfi and APPTECH CORP

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Alfi and APPTECH is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Alfi Inc and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and Alfi 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 Alfi Inc 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 Alfi i.e., Alfi and APPTECH CORP go up and down completely randomly.

Pair Corralation between Alfi and APPTECH CORP

Considering the 90-day investment horizon Alfi Inc is expected to generate 0.44 times more return on investment than APPTECH CORP. However, Alfi Inc is 2.26 times less risky than APPTECH CORP. It trades about 0.04 of its potential returns per unit of risk. APPTECH CORP is currently generating about -0.11 per unit of risk. If you would invest  116.00  in Alfi Inc on April 6, 2022 and sell it today you would earn a total of  2.00  from holding Alfi Inc or generate 1.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Alfi Inc  vs.  APPTECH CORP

 Performance (%) 
      Timeline 
Alfi Inc 
Alfi Performance
0 of 100
Over the last 90 days Alfi Inc 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 essential indicators remain rather sound which may send shares a bit higher in August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alfi Price Channel

APPTECH CORP 
APPTECH Performance
0 of 100
Over the last 90 days APPTECH 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 fundamental indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Last Split Factor
1:9
Last Split Date
2022-01-05

APPTECH Price Channel

Alfi and APPTECH CORP Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alfi and APPTECH CORP

The main advantage of trading using opposite Alfi and APPTECH CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfi 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 Alfi Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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