Correlation Between APPTECH CORP and Alfi

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

Diversification Opportunities for APPTECH CORP and Alfi

0.75
  Correlation Coefficient

Poor diversification

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

Pair Corralation between APPTECH CORP and Alfi

Given the investment horizon of 90 days APPTECH CORP is expected to generate 0.86 times more return on investment than Alfi. However, APPTECH CORP is 1.16 times less risky than Alfi. It trades about 0.03 of its potential returns per unit of risk. Alfi Inc is currently generating about 0.01 per unit of risk. If you would invest  109.00  in APPTECH CORP on April 6, 2022 and sell it today you would lose (49.00)  from holding APPTECH CORP or give up 44.95% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

APPTECH CORP  vs.  Alfi Inc

 Performance (%) 
      Timeline 
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 sluggish 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 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 sluggish 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 and Alfi Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with APPTECH CORP and Alfi

The main advantage of trading using opposite APPTECH CORP and Alfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPTECH CORP position performs unexpectedly, Alfi 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 Alfi will offset losses from the drop in Alfi's long position.
The idea behind APPTECH CORP and Alfi Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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