Correlation Between AuthID and Bandwidth

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

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

Diversification Opportunities for AuthID and Bandwidth

-0.38

Correlation Coefficient

AuthID  Bandwidth

Very good diversification

The 3 months correlation between AuthID and Bandwidth is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Bandwidth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bandwidth and AuthID 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 authID Inc are associated (or correlated) with Bandwidth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bandwidth has no effect on the direction of AuthID i.e., AuthID and Bandwidth go up and down completely randomly.

Pair Corralation between AuthID and Bandwidth

Given the investment horizon of 90 days authID Inc is expected to under-perform the Bandwidth. In addition to that, AuthID is 1.93 times more volatile than Bandwidth. It trades about -0.03 of its total potential returns per unit of risk. Bandwidth is currently generating about 0.12 per unit of volatility. If you would invest  1,632  in Bandwidth on September 12, 2024 and sell it today you would earn a total of  349.00  from holding Bandwidth or generate 21.38% return on investment over 90 days.

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

authID Inc  vs.  Bandwidth

authID Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days authID Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bandwidth

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bandwidth are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bandwidth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AuthID and Bandwidth

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

The idea behind authID Inc and Bandwidth 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..