Correlation Between Aeye and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Aeye and ECARX Holdings 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 ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and ECARX Holdings Class, you can compare the effects of market volatilities on Aeye and ECARX Holdings 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 ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and ECARX Holdings.
Diversification Opportunities for Aeye and ECARX Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aeye and ECARX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Aeye i.e., Aeye and ECARX Holdings go up and down completely randomly.
Pair Corralation between Aeye and ECARX Holdings
Given the investment horizon of 90 days Aeye Inc is expected to under-perform the ECARX Holdings. In addition to that, Aeye is 1.09 times more volatile than ECARX Holdings Class. It trades about 0.0 of its total potential returns per unit of risk. ECARX Holdings Class is currently generating about 0.06 per unit of volatility. If you would invest 182.00 in ECARX Holdings Class on September 5, 2024 and sell it today you would earn a total of 8.00 from holding ECARX Holdings Class or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. ECARX Holdings Class
Performance |
| Timeline |
| Aeye Inc |
| ECARX Holdings Class |
Aeye and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and ECARX Holdings
The main advantage of trading using opposite Aeye and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, ECARX Holdings 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.| Aeye vs. Innoviz Technologies | Aeye vs. Xos Equity Warrants | Aeye vs. Aquagold International | Aeye vs. Morningstar Unconstrained Allocation |
| ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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