Correlation Between Auddia and Grom Social
Can any of the company-specific risk be diversified away by investing in both Auddia and Grom Social 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 Grom Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auddia Inc and Grom Social Enterprises, you can compare the effects of market volatilities on Auddia and Grom Social 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 Grom Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auddia and Grom Social.
Diversification Opportunities for Auddia and Grom Social
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auddia and Grom is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and Grom Social Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grom Social Enterprises 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 Grom Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grom Social Enterprises has no effect on the direction of Auddia i.e., Auddia and Grom Social go up and down completely randomly.
Pair Corralation between Auddia and Grom Social
Assuming the 90 days horizon Auddia Inc is expected to generate 1.37 times more return on investment than Grom Social. However, Auddia is 1.37 times more volatile than Grom Social Enterprises. It trades about 0.15 of its potential returns per unit of risk. Grom Social Enterprises is currently generating about 0.11 per unit of risk. If you would invest 5.58 in Auddia Inc on September 1, 2024 and sell it today you would lose (3.61) from holding Auddia Inc or give up 64.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.62% |
| Values | Daily Returns |
Auddia Inc vs. Grom Social Enterprises
Performance |
| Timeline |
| Auddia Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Grom Social Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Auddia and Grom Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auddia and Grom Social
The main advantage of trading using opposite Auddia and Grom Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auddia position performs unexpectedly, Grom Social 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 Grom Social will offset losses from the drop in Grom Social's long position.| Auddia vs. Eldorado Gold Corp | Auddia vs. Usio Inc | Auddia vs. Evertz Technologies Limited | Auddia vs. Cementos Pacasmayo SAA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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