Correlation Between AudioCodes and Godaddy

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

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

Diversification Opportunities for AudioCodes and Godaddy

-0.65

Correlation Coefficient

AudioCodes  Godaddy

Excellent diversification

The 3 months correlation between AudioCodes and Godaddy is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and Godaddy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Godaddy and AudioCodes 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 AudioCodes are associated (or correlated) with Godaddy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Godaddy has no effect on the direction of AudioCodes i.e., AudioCodes and Godaddy go up and down completely randomly.

Pair Corralation between AudioCodes and Godaddy

Given the investment horizon of 90 days AudioCodes is expected to generate 3.49 times more return on investment than Godaddy. However, AudioCodes is 3.49 times more volatile than Godaddy. It trades about 0.04 of its potential returns per unit of risk. Godaddy is currently generating about -0.23 per unit of risk. If you would invest  928.00  in AudioCodes on May 3, 2025 and sell it today you would earn a total of  40.00  from holding AudioCodes or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AudioCodes  vs.  Godaddy

AudioCodes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AudioCodes are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AudioCodes may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Godaddy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Godaddy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AudioCodes and Godaddy

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

The idea behind AudioCodes and Godaddy 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 Transaction History module to view history of all your transactions and understand their impact on performance.