Correlation Between Auddia and Fossil

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

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

Diversification Opportunities for Auddia and Fossil

-0.21

Correlation Coefficient

Auddia  Fossil

Very good diversification

The 3 months correlation between Auddia and Fossil is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Fossil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group 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 Fossil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group has no effect on the direction of Auddia i.e., Auddia and Fossil go up and down completely randomly.

Pair Corralation between Auddia and Fossil

Assuming the 90 days horizon Auddia Inc is expected to under-perform the Fossil. In addition to that, Auddia is 2.24 times more volatile than Fossil Group. It trades about 0.0 of its total potential returns per unit of risk. Fossil Group is currently generating about 0.14 per unit of volatility. If you would invest  104.00  in Fossil Group on September 17, 2024 and sell it today you would earn a total of  83.00  from holding Fossil Group or generate 79.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.69%
Values	Daily Returns

Auddia Inc  vs.  Fossil Group

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 fairly stable fundamental indicators, Auddia is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fossil Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fossil Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Fossil disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auddia and Fossil

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

The idea behind Auddia Inc and Fossil 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.