Correlation Between Auddia and Data Storage

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

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

Diversification Opportunities for Auddia and Data Storage

-0.03

Correlation Coefficient

Auddia  Data Storage

Good diversification

The 3 months correlation between Auddia and Data is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Data Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage 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 Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage has no effect on the direction of Auddia i.e., Auddia and Data Storage go up and down completely randomly.

Pair Corralation between Auddia and Data Storage

Assuming the 90 days horizon Auddia Inc is expected to generate 2.23 times more return on investment than Data Storage. However, Auddia is 2.23 times more volatile than Data Storage. It trades about 0.06 of its potential returns per unit of risk. Data Storage is currently generating about -0.09 per unit of risk. If you would invest  2.47  in Auddia Inc on December 28, 2024 and sell it today you would lose (0.58) from holding Auddia Inc or give up 23.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.36%
Values	Daily Returns

Auddia Inc  vs.  Data Storage

Auddia Inc

Risk-Adjusted Performance

Insignificant

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Data Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Storage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Auddia and Data Storage

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

The idea behind Auddia Inc and Data Storage 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.