Correlation Between Appen and International Business

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

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

Diversification Opportunities for Appen and International Business

0.31

Correlation Coefficient

Appen  International Business

Weak diversification

The 3 months correlation between Appen and International is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Appen 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 Appen Limited are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Appen i.e., Appen and International Business go up and down completely randomly.

Pair Corralation between Appen and International Business

Assuming the 90 days horizon Appen Limited is expected to generate 4.55 times more return on investment than International Business. However, Appen is 4.55 times more volatile than International Business Machines. It trades about 0.14 of its potential returns per unit of risk. International Business Machines is currently generating about 0.2 per unit of risk. If you would invest  53.00  in Appen Limited on March 5, 2025 and sell it today you would earn a total of  23.00  from holding Appen Limited or generate 43.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Appen Limited  vs.  International Business Machine

Appen Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appen Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

International Business

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, International Business is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Appen and International Business

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

The idea behind Appen Limited and International Business Machines 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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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 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.