Correlation Between Viemed Healthcare and Auddia

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

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

Diversification Opportunities for Viemed Healthcare and Auddia

-0.1

Correlation Coefficient

Viemed Healthcare  Auddia

Good diversification

The 3 months correlation between Viemed and Auddia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Auddia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auddia Inc and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Auddia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auddia Inc has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Auddia go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Auddia

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Auddia. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 11.35 times less risky than Auddia. The stock trades about -0.09 of its potential returns per unit of risk. The Auddia Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.47  in Auddia Inc on December 29, 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	65.57%
Values	Daily Returns

Viemed Healthcare  vs.  Auddia Inc

Viemed Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 unsteady fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viemed Healthcare and Auddia

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

The idea behind Viemed Healthcare and Auddia 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.