Correlation Between AuthID and Pagaya Technologies
Can any of the company-specific risk be diversified away by investing in both AuthID and Pagaya Technologies 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 AuthID and Pagaya Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between authID Inc and Pagaya Technologies, you can compare the effects of market volatilities on AuthID and Pagaya Technologies 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 AuthID with a short position of Pagaya Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuthID and Pagaya Technologies.
Diversification Opportunities for AuthID and Pagaya Technologies
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AuthID and Pagaya is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and Pagaya Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies and AuthID 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 authID Inc are associated (or correlated) with Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of AuthID i.e., AuthID and Pagaya Technologies go up and down completely randomly.
Pair Corralation between AuthID and Pagaya Technologies
Given the investment horizon of 90 days authID Inc is expected to under-perform the Pagaya Technologies. But the stock apears to be less risky and, when comparing its historical volatility, authID Inc is 2.51 times less risky than Pagaya Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The Pagaya Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,264 in Pagaya Technologies on August 27, 2024 and sell it today you would lose (214.00) from holding Pagaya Technologies or give up 16.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
authID Inc vs. Pagaya Technologies
Performance |
| Timeline |
| authID Inc |
| Pagaya Technologies |
AuthID and Pagaya Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AuthID and Pagaya Technologies
The main advantage of trading using opposite AuthID and Pagaya Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuthID position performs unexpectedly, Pagaya Technologies 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 Pagaya Technologies will offset losses from the drop in Pagaya Technologies' long position.| AuthID vs. Datasea | AuthID vs. Priority Technology Holdings | AuthID vs. Fuse Science | AuthID vs. Cerberus Cyber Sentinel |
| Pagaya Technologies vs. GigaCloud Technology Class | Pagaya Technologies vs. Arqit Quantum | Pagaya Technologies vs. Cemtrex | Pagaya Technologies vs. Paysafe |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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