Correlation Between Repay Holdings and AuthID

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

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

Diversification Opportunities for Repay Holdings and AuthID

0.27

Correlation Coefficient

Repay Holdings  AuthID

Modest diversification

The 3 months correlation between Repay and AuthID is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Repay Holdings Corp and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc and Repay Holdings 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 Repay Holdings Corp are associated (or correlated) with AuthID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of authID Inc has no effect on the direction of Repay Holdings i.e., Repay Holdings and AuthID go up and down completely randomly.

Pair Corralation between Repay Holdings and AuthID

Given the investment horizon of 90 days Repay Holdings Corp is expected to under-perform the AuthID. But the stock apears to be less risky and, when comparing its historical volatility, Repay Holdings Corp is 3.77 times less risky than AuthID. The stock trades about -0.05 of its potential returns per unit of risk. The authID Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  656.00  in authID Inc on September 23, 2024 and sell it today you would earn a total of  47.00  from holding authID Inc or generate 7.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Repay Holdings Corp  vs.  authID Inc

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

authID Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in authID Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, AuthID may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Repay Holdings and AuthID

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

The idea behind Repay Holdings Corp and authID Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.