Correlation Between Verizon Communications and Augmedix

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Can any of the company-specific risk be diversified away by investing in both Verizon Communications and Augmedix 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 Verizon Communications and Augmedix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and Augmedix, you can compare the effects of market volatilities on Verizon Communications and Augmedix 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 Verizon Communications with a short position of Augmedix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and Augmedix.

Diversification Opportunities for Verizon Communications and Augmedix

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Verizon and Augmedix is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Augmedix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augmedix and Verizon Communications 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 Verizon Communications are associated (or correlated) with Augmedix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augmedix has no effect on the direction of Verizon Communications i.e., Verizon Communications and Augmedix go up and down completely randomly.

Pair Corralation between Verizon Communications and Augmedix

Allowing for the 90-day total investment horizon Verizon Communications is expected to under-perform the Augmedix. But the stock apears to be less risky and, when comparing its historical volatility, Verizon Communications is 6.18 times less risky than Augmedix. The stock trades about -0.39 of its potential returns per unit of risk. The Augmedix is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Augmedix on June 30, 2022 and sell it today you would earn a total of  2.00  from holding Augmedix or generate 1.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Verizon Communications  vs.  Augmedix

 Performance (%) 
       Timeline  
Verizon Communications 
Verizon Performance
0 of 100
Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Verizon Price Channel

Augmedix 
Augmedix Performance
0 of 100
Over the last 90 days Augmedix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Augmedix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Augmedix Price Channel

Verizon Communications and Augmedix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Verizon Communications and Augmedix

The main advantage of trading using opposite Verizon Communications and Augmedix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications position performs unexpectedly, Augmedix 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 Augmedix will offset losses from the drop in Augmedix's long position.
Verizon Communications vs. Clearwater Paper Corp
The idea behind Verizon Communications and Augmedix 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.
Augmedix vs. Clearwater Paper Corp
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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