Correlation Between Appian Corp and Informatica Inc

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

Diversification Opportunities for Appian Corp and Informatica Inc

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Appian and Informatica is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp Cl and Informatica Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informatica Inc and Appian 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 Appian Corp Cl are associated (or correlated) with Informatica Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informatica Inc has no effect on the direction of Appian Corp i.e., Appian Corp and Informatica Inc go up and down completely randomly.

Pair Corralation between Appian Corp and Informatica Inc

Given the investment horizon of 90 days Appian Corp Cl is expected to generate 1.46 times more return on investment than Informatica Inc. However, Appian Corp is 1.46 times more volatile than Informatica Inc Cl. It trades about -0.07 of its potential returns per unit of risk. Informatica Inc Cl is currently generating about -0.11 per unit of risk. If you would invest  4,316  in Appian Corp Cl on July 4, 2022 and sell it today you would lose (233.00)  from holding Appian Corp Cl or give up 5.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Appian Corp Cl  vs.  Informatica Inc Cl

 Performance (%) 
       Timeline  
Appian Corp Cl 
Appian Performance
0 of 100
Over the last 90 days Appian Corp Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Appian Price Channel

Informatica Inc 
Informatica Performance
0 of 100
Over the last 90 days Informatica Inc Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Informatica Inc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Informatica Price Channel

Appian Corp and Informatica Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Appian Corp and Informatica Inc

The main advantage of trading using opposite Appian Corp and Informatica Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp position performs unexpectedly, Informatica Inc 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 Informatica Inc will offset losses from the drop in Informatica Inc's long position.
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The idea behind Appian Corp Cl and Informatica Inc Cl 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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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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