Correlation Between Appen and SDI Group

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

By analyzing existing cross correlation between Appen Limited and SDI Group plc, you can compare the effects of market volatilities on Appen and SDI Group 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 SDI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and SDI Group.

Diversification Opportunities for Appen and SDI Group

-0.87

Correlation Coefficient

Appen  SDI Group

Pay attention - limited upside

The 3 months correlation between Appen and SDI is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and SDI Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SDI Group plc 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 SDI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SDI Group plc has no effect on the direction of Appen i.e., Appen and SDI Group go up and down completely randomly.

Pair Corralation between Appen and SDI Group

Assuming the 90 days horizon Appen Limited is expected to under-perform the SDI Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Appen Limited is 2.44 times less risky than SDI Group. The pink sheet trades about -0.06 of its potential returns per unit of risk. The SDI Group plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  66.00  in SDI Group plc on August 20, 2025 and sell it today you would earn a total of  55.00  from holding SDI Group plc or generate 83.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Appen Limited  vs.  SDI Group plc

Appen Limited

Risk-Adjusted Performance

Weakest

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

SDI Group plc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SDI Group plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, SDI Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Appen and SDI Group

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

The idea behind Appen Limited and SDI Group plc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.