Correlation Between Shift4 Payments and Aeye
Can any of the company-specific risk be diversified away by investing in both Shift4 Payments 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 Shift4 Payments and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift4 Payments and Aeye Inc, you can compare the effects of market volatilities on Shift4 Payments 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 Shift4 Payments with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and Aeye.
Diversification Opportunities for Shift4 Payments and Aeye
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shift4 and Aeye is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Shift4 Payments 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 Shift4 Payments 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 Shift4 Payments i.e., Shift4 Payments and Aeye go up and down completely randomly.
Pair Corralation between Shift4 Payments and Aeye
Given the investment horizon of 90 days Shift4 Payments is expected to generate 8.65 times less return on investment than Aeye. But when comparing it to its historical volatility, Shift4 Payments is 1.89 times less risky than Aeye. It trades about 0.05 of its potential returns per unit of risk. Aeye Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Aeye Inc on September 18, 2024 and sell it today you would earn a total of 35.00 from holding Aeye Inc or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shift4 Payments vs. Aeye Inc
Performance |
| Timeline |
| Shift4 Payments |
| Aeye Inc |
Shift4 Payments and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shift4 Payments and Aeye
The main advantage of trading using opposite Shift4 Payments and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments 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.| Shift4 Payments vs. SentinelOne | Shift4 Payments vs. Confluent | Shift4 Payments vs. Hashicorp | Shift4 Payments vs. MongoDB |
| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Quantumscape Corp | Aeye vs. Hyliion Holdings 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 the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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