Correlation Between Dow Jones and AuthID
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and AuthID into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and authID Inc, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of AuthID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AuthID.
Diversification Opportunities for Dow Jones and AuthID
Modest diversification
The 3 months correlation between Dow and AuthID is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID Inc and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and AuthID go up and down completely randomly.
Pair Corralation between Dow Jones and AuthID
Assuming the 90 days trading horizon Dow Jones is expected to generate 12.05 times less return on investment than AuthID. But when comparing it to its historical volatility, Dow Jones Industrial is 7.44 times less risky than AuthID. It trades about 0.04 of its potential returns per unit of risk. authID Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 280.00 in authID Inc on January 17, 2025 and sell it today you would earn a total of 517.00 from holding authID Inc or generate 184.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. authID Inc
Performance |
| Timeline |
Dow Jones and AuthID Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
authID Inc
Pair trading matchups for AuthID
Pair Trading with Dow Jones and AuthID
The main advantage of trading using opposite Dow Jones and AuthID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Bowhead Specialty Holdings | Dow Jones vs. Unum Group | Dow Jones vs. Grupo Aeroportuario del | Dow Jones vs. Air Lease |
| AuthID vs. Datasea | AuthID vs. Priority Technology Holdings | AuthID vs. Fuse Science | AuthID vs. Cerberus Cyber Sentinel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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