Correlation Between Auddia and Computer Modelling

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

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

Diversification Opportunities for Auddia and Computer Modelling

-0.02

Correlation Coefficient

Auddia  Computer Modelling

Good diversification

The 3 months correlation between Auddia and Computer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling 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 Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of Auddia i.e., Auddia and Computer Modelling go up and down completely randomly.

Pair Corralation between Auddia and Computer Modelling

Assuming the 90 days horizon Auddia Inc is expected to generate 7.66 times more return on investment than Computer Modelling. However, Auddia is 7.66 times more volatile than Computer Modelling Group. It trades about 0.1 of its potential returns per unit of risk. Computer Modelling Group is currently generating about -0.19 per unit of risk. If you would invest  1.80  in Auddia Inc on December 21, 2024 and sell it today you would earn a total of  0.09  from holding Auddia Inc or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.27%
Values	Daily Returns

Auddia Inc  vs.  Computer Modelling Group

Auddia Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auddia Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Computer Modelling

Risk-Adjusted Performance

Very Weak

Over the last 90 days Computer Modelling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Auddia and Computer Modelling

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

The idea behind Auddia Inc and Computer Modelling 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.