Correlation Between DigiAsia Corp and AEye
Can any of the company-specific risk be diversified away by investing in both DigiAsia Corp and AEye 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 DigiAsia Corp and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DigiAsia Corp and AEye Inc, you can compare the effects of market volatilities on DigiAsia Corp and AEye 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 DigiAsia Corp with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiAsia Corp and AEye.
Diversification Opportunities for DigiAsia Corp and AEye
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DigiAsia and AEye is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and DigiAsia Corp 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 DigiAsia Corp are associated (or correlated) with AEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEye Inc has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and AEye go up and down completely randomly.
Pair Corralation between DigiAsia Corp and AEye
Given the investment horizon of 90 days DigiAsia Corp is expected to under-perform the AEye. But the stock apears to be less risky and, when comparing its historical volatility, DigiAsia Corp is 2.55 times less risky than AEye. The stock trades about -0.07 of its potential returns per unit of risk. The AEye Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11.00 in AEye Inc on August 29, 2024 and sell it today you would lose (9.50) from holding AEye Inc or give up 86.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.07% |
| Values | Daily Returns |
DigiAsia Corp vs. AEye Inc
Performance |
| Timeline |
| DigiAsia Corp |
| AEye Inc |
DigiAsia Corp and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DigiAsia Corp and AEye
The main advantage of trading using opposite DigiAsia Corp and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigiAsia Corp position performs unexpectedly, AEye 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 AEye will offset losses from the drop in AEye's long position.| DigiAsia Corp vs. SentinelOne | DigiAsia Corp vs. CyberArk Software | DigiAsia Corp vs. MongoDB | DigiAsia Corp vs. Appian Corp |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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