Correlation Between Audience and Applied Opt

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

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

Diversification Opportunities for Audience and Applied Opt

0.0

Correlation Coefficient

Audience  Applied Opt

Pay attention - limited upside

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

Pair Corralation between Audience and Applied Opt

If you would invest (100.00) in Audience on January 20, 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

Audience  vs.  Applied Opt

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Audience and Applied Opt

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

The idea behind Audience and Applied Opt 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.