Correlation Between VirnetX Holding and AuthID

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

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

Diversification Opportunities for VirnetX Holding and AuthID

0.34

Correlation Coefficient

VirnetX Holding  AuthID

Weak diversification

The 3 months correlation between VirnetX and AuthID is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc and VirnetX Holding 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 VirnetX Holding 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 VirnetX Holding i.e., VirnetX Holding and AuthID go up and down completely randomly.

Pair Corralation between VirnetX Holding and AuthID

Considering the 90-day investment horizon VirnetX Holding Corp is expected to generate 0.81 times more return on investment than AuthID. However, VirnetX Holding Corp is 1.23 times less risky than AuthID. It trades about -0.16 of its potential returns per unit of risk. authID Inc is currently generating about -0.22 per unit of risk. If you would invest  627.00  in VirnetX Holding Corp on August 30, 2024 and sell it today you would lose (73.00) from holding VirnetX Holding Corp or give up 11.64% of portfolio value over 90 days.

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

VirnetX Holding Corp  vs.  authID Inc

VirnetX Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VirnetX Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical 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.

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.

Pair Trading with VirnetX Holding and AuthID

The main advantage of trading using opposite VirnetX Holding and AuthID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirnetX Holding 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 VirnetX Holding 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.