Correlation Between Applied Opt and Audience

Can any of the company-specific risk be diversified away by investing in both Applied Opt and Audience 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 Applied Opt and Audience into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Applied Opt and Audience, you can compare the effects of market volatilities on Applied Opt and Audience 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 Applied Opt with a short position of Audience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and Audience.

Diversification Opportunities for Applied Opt and Audience

0.0

Correlation Coefficient

Applied Opt  Audience

Pay attention - limited upside

The 3 months correlation between Applied and Audience is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and Audience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Audience and Applied Opt 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 Applied Opt are associated (or correlated) with Audience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Audience has no effect on the direction of Applied Opt i.e., Applied Opt and Audience go up and down completely randomly.

Pair Corralation between Applied Opt and Audience

If you would invest (100.00) in Audience on January 26, 2024 and sell it today you would earn a total of  100.00  from holding Audience or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Applied Opt  vs.  Audience

Applied Opt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Opt 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 fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Audience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Audience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Audience is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Applied Opt and Audience

The main advantage of trading using opposite Applied Opt and Audience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt position performs unexpectedly, Audience 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 Audience will offset losses from the drop in Audience's long position.

The idea behind Applied Opt and Audience 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 the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.