Correlation Between AuthID and Cloudflare

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

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

Diversification Opportunities for AuthID and Cloudflare

-0.66

Correlation Coefficient

AuthID  Cloudflare

Excellent diversification

The 3 months correlation between AuthID and Cloudflare is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Cloudflare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudflare 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 Cloudflare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudflare has no effect on the direction of AuthID i.e., AuthID and Cloudflare go up and down completely randomly.

Pair Corralation between AuthID and Cloudflare

Given the investment horizon of 90 days authID Inc is expected to under-perform the Cloudflare. In addition to that, AuthID is 2.54 times more volatile than Cloudflare. It trades about -0.05 of its total potential returns per unit of risk. Cloudflare is currently generating about 0.23 per unit of volatility. If you would invest  8,771  in Cloudflare on October 6, 2024 and sell it today you would earn a total of  2,702  from holding Cloudflare or generate 30.81% return on investment over 90 days.

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

authID Inc  vs.  Cloudflare

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 February 2025.

Cloudflare

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cloudflare are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, Cloudflare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AuthID and Cloudflare

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

The idea behind authID Inc and Cloudflare 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.