Correlation Between Appian Corp and Sega Sammy

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

Diversification Opportunities for Appian Corp and Sega Sammy

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Appian and SGAMF is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp and Sega Sammy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sega Sammy Holdings 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 are associated (or correlated) with Sega Sammy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sega Sammy Holdings has no effect on the direction of Appian Corp i.e., Appian Corp and Sega Sammy go up and down completely randomly.

Pair Corralation between Appian Corp and Sega Sammy

Given the investment horizon of 90 days Appian Corp is expected to under-perform the Sega Sammy. In addition to that, Appian Corp is 41.91 times more volatile than Sega Sammy Holdings. It trades about -0.05 of its total potential returns per unit of risk. Sega Sammy Holdings is currently generating about 0.13 per unit of volatility. If you would invest  1,677  in Sega Sammy Holdings on September 7, 2022 and sell it today you would earn a total of  14.00  from holding Sega Sammy Holdings or generate 0.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

Appian Corp  vs.  Sega Sammy Holdings

 Performance (%) 
       Timeline  
Appian Corp 
Appian Performance
0 of 100
Over the last 90 days Appian Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Appian Price Channel

Sega Sammy Holdings 
SGAMF Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sega Sammy Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Sega Sammy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SGAMF Price Channel

Appian Corp and Sega Sammy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Appian Corp and Sega Sammy

The main advantage of trading using opposite Appian Corp and Sega Sammy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp position performs unexpectedly, Sega Sammy 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 Sega Sammy will offset losses from the drop in Sega Sammy's long position.
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The idea behind Appian Corp and Sega Sammy Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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