Correlation Between Cerence and Appfolio
Can any of the company-specific risk be diversified away by investing in both Cerence and Appfolio 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 Cerence and Appfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerence and Appfolio, you can compare the effects of market volatilities on Cerence and Appfolio 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 Cerence with a short position of Appfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerence and Appfolio.
Diversification Opportunities for Cerence and Appfolio
Average diversification
The 3 months correlation between Cerence and Appfolio is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cerence and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and Cerence 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 Cerence are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of Cerence i.e., Cerence and Appfolio go up and down completely randomly.
Pair Corralation between Cerence and Appfolio
Given the investment horizon of 90 days Cerence is expected to generate 4.21 times more return on investment than Appfolio. However, Cerence is 4.21 times more volatile than Appfolio. It trades about 0.11 of its potential returns per unit of risk. Appfolio is currently generating about -0.33 per unit of risk. If you would invest 855.00 in Cerence on June 6, 2025 and sell it today you would earn a total of 112.00 from holding Cerence or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cerence vs. Appfolio
Performance |
| Timeline |
| Cerence |
| Appfolio |
Cerence and Appfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerence and Appfolio
The main advantage of trading using opposite Cerence and Appfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerence position performs unexpectedly, Appfolio 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 Appfolio will offset losses from the drop in Appfolio's long position.The idea behind Cerence and Appfolio 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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