Correlation Between AuthID and EverCommerce

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

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

Diversification Opportunities for AuthID and EverCommerce

-0.14

Correlation Coefficient

AuthID  EverCommerce

Good diversification

The 3 months correlation between AuthID and EverCommerce is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and EverCommerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverCommerce 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 EverCommerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverCommerce has no effect on the direction of AuthID i.e., AuthID and EverCommerce go up and down completely randomly.

Pair Corralation between AuthID and EverCommerce

Given the investment horizon of 90 days authID Inc is expected to under-perform the EverCommerce. In addition to that, AuthID is 2.74 times more volatile than EverCommerce. It trades about -0.07 of its total potential returns per unit of risk. EverCommerce is currently generating about 0.15 per unit of volatility. If you would invest  1,035  in EverCommerce on September 1, 2024 and sell it today you would earn a total of  180.00  from holding EverCommerce or generate 17.39% 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.  EverCommerce

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 uncertain performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

EverCommerce

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EverCommerce are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, EverCommerce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AuthID and EverCommerce

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

The idea behind authID Inc and EverCommerce 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.