Correlation Between Principal Financial and Appian Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Principal Financial 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 Principal Financial and Appian Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Financial Group and Appian Corp, you can compare the effects of market volatilities on Principal Financial 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 Principal Financial with a short position of Appian Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Financial and Appian Corp.

Diversification Opportunities for Principal Financial and Appian Corp

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Principal and Appian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Principal Financial Group and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and Principal Financial 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 Principal Financial Group 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 Principal Financial i.e., Principal Financial and Appian Corp go up and down completely randomly.

Pair Corralation between Principal Financial and Appian Corp

Considering the 90-day investment horizon Principal Financial Group is expected to generate 0.44 times more return on investment than Appian Corp. However, Principal Financial Group is 2.26 times less risky than Appian Corp. It trades about 0.1 of its potential returns per unit of risk. Appian Corp is currently generating about 0.02 per unit of risk. If you would invest  8,939  in Principal Financial Group on September 6, 2022 and sell it today you would earn a total of  279.00  from holding Principal Financial Group or generate 3.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Principal Financial Group  vs.  Appian Corp

 Performance (%) 
       Timeline  
Principal Financial 
Principal Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Principal Financial Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Principal Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Principal Price Channel

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 latest abnormal performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Appian Price Channel

Principal Financial and Appian Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Principal Financial and Appian Corp

The main advantage of trading using opposite Principal Financial and Appian Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Financial 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.
Principal Financial vs. Altisource Asset Management
Principal Financial vs. Blackrock Multi Sector
Principal Financial vs. Central Securities
Principal Financial vs. CI Financial Corp
The idea behind Principal Financial Group 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.
Appian Corp vs. ACI Worldwide
Appian Corp vs. Altair Engineering
Appian Corp vs. Box Inc
Appian Corp vs. Consensus Cloud Solutions
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go