Correlation Between Arqit Quantum and AuthID

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

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

Diversification Opportunities for Arqit Quantum and AuthID

-0.22

Correlation Coefficient

Arqit Quantum  AuthID

Very good diversification

The 3 months correlation between Arqit and AuthID is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc and Arqit Quantum 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 Arqit Quantum 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 Arqit Quantum i.e., Arqit Quantum and AuthID go up and down completely randomly.

Pair Corralation between Arqit Quantum and AuthID

Given the investment horizon of 90 days Arqit Quantum is expected to generate 2.59 times more return on investment than AuthID. However, Arqit Quantum is 2.59 times more volatile than authID Inc. It trades about 0.18 of its potential returns per unit of risk. authID Inc is currently generating about -0.07 per unit of risk. If you would invest  760.00  in Arqit Quantum on September 1, 2024 and sell it today you would earn a total of  1,238  from holding Arqit Quantum or generate 162.89% return on investment over 90 days.

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

Arqit Quantum  vs.  authID Inc

Arqit Quantum

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Arqit Quantum reported solid returns over the last few months and may actually be approaching a breakup point.

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 Arqit Quantum and AuthID

The main advantage of trading using opposite Arqit Quantum and AuthID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arqit Quantum 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 Arqit Quantum 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.