Correlation Between Auddia and Grom Social

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

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

Diversification Opportunities for Auddia and Grom Social

0.7

Correlation Coefficient

Auddia  Grom Social

Poor diversification

The 3 months correlation between Auddia and Grom is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Grom Social Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grom Social Enterprises and Auddia 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 Auddia Inc are associated (or correlated) with Grom Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grom Social Enterprises has no effect on the direction of Auddia i.e., Auddia and Grom Social go up and down completely randomly.

Pair Corralation between Auddia and Grom Social

If you would invest  4.60  in Grom Social Enterprises on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Grom Social Enterprises or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Auddia Inc  vs.  Grom Social Enterprises

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Grom Social Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grom Social Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grom Social is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Auddia and Grom Social

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

The idea behind Auddia Inc and Grom Social Enterprises 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.