Correlation Between Fuse Science and AuthID

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

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

Diversification Opportunities for Fuse Science and AuthID

0.32

Correlation Coefficient

Fuse Science  AuthID

Weak diversification

The 3 months correlation between Fuse and AuthID is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fuse Science and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc and Fuse Science 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 Fuse Science are associated (or correlated) with AuthID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of authID Inc has no effect on the direction of Fuse Science i.e., Fuse Science and AuthID go up and down completely randomly.

Pair Corralation between Fuse Science and AuthID

Given the investment horizon of 90 days Fuse Science is expected to under-perform the AuthID. In addition to that, Fuse Science is 1.83 times more volatile than authID Inc. It trades about -0.04 of its total potential returns per unit of risk. authID Inc is currently generating about 0.02 per unit of volatility. If you would invest  639.00  in authID Inc on December 28, 2024 and sell it today you would lose (11.50) from holding authID Inc or give up 1.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

Fuse Science  vs.  authID Inc

Fuse Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fuse Science has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

authID Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in authID Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, AuthID may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fuse Science and AuthID

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

The idea behind Fuse Science and authID Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.