Correlation Between Aeye and Allego
Can any of the company-specific risk be diversified away by investing in both Aeye and Allego 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 Aeye and Allego into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Allego Inc, you can compare the effects of market volatilities on Aeye and Allego 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 Aeye with a short position of Allego. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Allego.
Diversification Opportunities for Aeye and Allego
Modest diversification
The 3 months correlation between Aeye and Allego is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Allego Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allego Inc and Aeye 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 Aeye Inc are associated (or correlated) with Allego. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allego Inc has no effect on the direction of Aeye i.e., Aeye and Allego go up and down completely randomly.
Pair Corralation between Aeye and Allego
Given the investment horizon of 90 days Aeye Inc is expected to under-perform the Allego. But the stock apears to be less risky and, when comparing its historical volatility, Aeye Inc is 1.03 times less risky than Allego. The stock trades about -0.02 of its potential returns per unit of risk. The Allego Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 301.00 in Allego Inc on August 31, 2024 and sell it today you would lose (110.00) from holding Allego Inc or give up 36.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.98% |
| Values | Daily Returns |
Aeye Inc vs. Allego Inc
Performance |
| Timeline |
| Aeye Inc |
| Allego Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Aeye and Allego Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Allego
The main advantage of trading using opposite Aeye and Allego positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Allego 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 Allego will offset losses from the drop in Allego's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
| Allego vs. Lear Corporation | Allego vs. Autoliv | Allego vs. American Axle Manufacturing | Allego vs. Dorman Products |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |