Correlation Between AuthID and Global Blue

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

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

Diversification Opportunities for AuthID and Global Blue

-0.23

Correlation Coefficient

AuthID  Global Blue

Very good diversification

The 3 months correlation between AuthID and Global is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Global Blue Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blue Group 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 Global Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blue Group has no effect on the direction of AuthID i.e., AuthID and Global Blue go up and down completely randomly.

Pair Corralation between AuthID and Global Blue

Given the investment horizon of 90 days authID Inc is expected to under-perform the Global Blue. In addition to that, AuthID is 1.13 times more volatile than Global Blue Group. It trades about -0.17 of its total potential returns per unit of risk. Global Blue Group is currently generating about 0.04 per unit of volatility. If you would invest  721.00  in Global Blue Group on November 28, 2024 and sell it today you would earn a total of  11.00  from holding Global Blue Group or generate 1.53% 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.  Global Blue Group

authID Inc

Risk-Adjusted Performance

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 rather sound forward indicators, AuthID is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Blue Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Global Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AuthID and Global Blue

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

The idea behind authID Inc and Global Blue Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.