Correlation Between AudioEye and Aware
Can any of the company-specific risk be diversified away by investing in both AudioEye and Aware 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 AudioEye and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AudioEye and Aware Inc, you can compare the effects of market volatilities on AudioEye and Aware 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 AudioEye with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of AudioEye and Aware.
Diversification Opportunities for AudioEye and Aware
Excellent diversification
The 3 months correlation between AudioEye and Aware is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AudioEye and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and AudioEye 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 AudioEye are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of AudioEye i.e., AudioEye and Aware go up and down completely randomly.
Pair Corralation between AudioEye and Aware
Given the investment horizon of 90 days AudioEye is expected to generate 1.13 times more return on investment than Aware. However, AudioEye is 1.13 times more volatile than Aware Inc. It trades about 0.14 of its potential returns per unit of risk. Aware Inc is currently generating about -0.16 per unit of risk. If you would invest 2,245 in AudioEye on August 28, 2024 and sell it today you would earn a total of 403.00 from holding AudioEye or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AudioEye vs. Aware Inc
Performance |
| Timeline |
| AudioEye |
| Aware Inc |
AudioEye and Aware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AudioEye and Aware
The main advantage of trading using opposite AudioEye and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioEye position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.The idea behind AudioEye and Aware Inc 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.| Aware vs. Xcelmobility | Aware vs. Pushfor Investments | Aware vs. CurrentC Power | Aware vs. Agent Information Software |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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