Correlation Between AuthID and Xunlei

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

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

Diversification Opportunities for AuthID and Xunlei

-0.15

Correlation Coefficient

AuthID  Xunlei

Good diversification

The 3 months correlation between AuthID and Xunlei is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Xunlei Ltd Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xunlei Ltd Adr 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 Xunlei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xunlei Ltd Adr has no effect on the direction of AuthID i.e., AuthID and Xunlei go up and down completely randomly.

Pair Corralation between AuthID and Xunlei

Given the investment horizon of 90 days authID Inc is expected to generate 3.16 times more return on investment than Xunlei. However, AuthID is 3.16 times more volatile than Xunlei Ltd Adr. It trades about 0.09 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about -0.02 per unit of risk. If you would invest  562.00  in authID Inc on October 5, 2024 and sell it today you would earn a total of  62.00  from holding authID Inc or generate 11.03% 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.  Xunlei Ltd Adr

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 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.

Xunlei Ltd Adr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xunlei Ltd Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AuthID and Xunlei

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

The idea behind authID Inc and Xunlei Ltd Adr 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.