Correlation Between AuthID and MicroAlgo

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

By analyzing existing cross correlation between authID Inc and MicroAlgo, you can compare the effects of market volatilities on AuthID and MicroAlgo 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 MicroAlgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuthID and MicroAlgo.

Diversification Opportunities for AuthID and MicroAlgo

0.68

Correlation Coefficient

AuthID  MicroAlgo

Poor diversification

The 3 months correlation between AuthID and MicroAlgo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding authID Inc and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of AuthID i.e., AuthID and MicroAlgo go up and down completely randomly.

Pair Corralation between AuthID and MicroAlgo

Given the investment horizon of 90 days authID Inc is expected to generate 0.48 times more return on investment than MicroAlgo. However, authID Inc is 2.07 times less risky than MicroAlgo. It trades about -0.07 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.18 per unit of risk. If you would invest  549.00  in authID Inc on May 15, 2025 and sell it today you would lose (143.00) from holding authID Inc or give up 26.05% 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.  MicroAlgo

authID Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days authID Inc 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 forward indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MicroAlgo

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AuthID and MicroAlgo

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

The idea behind authID Inc and MicroAlgo 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.