Correlation Between AuthID and Tego Cyber

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

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

Diversification Opportunities for AuthID and Tego Cyber

0.41

Correlation Coefficient

AuthID  Tego Cyber

Very weak diversification

The 3 months correlation between AuthID and Tego is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Tego Cyber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tego Cyber 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 Tego Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tego Cyber has no effect on the direction of AuthID i.e., AuthID and Tego Cyber go up and down completely randomly.

Pair Corralation between AuthID and Tego Cyber

Given the investment horizon of 90 days AuthID is expected to generate 1.38 times less return on investment than Tego Cyber. But when comparing it to its historical volatility, authID Inc is 3.16 times less risky than Tego Cyber. It trades about 0.04 of its potential returns per unit of risk. Tego Cyber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.50  in Tego Cyber on December 24, 2024 and sell it today you would lose (4.50) from holding Tego Cyber or give up 52.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

authID Inc  vs.  Tego Cyber

authID Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in authID Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, AuthID exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tego Cyber

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tego Cyber are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Tego Cyber sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AuthID and Tego Cyber

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

The idea behind authID Inc and Tego Cyber 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.