Correlation Between Aeye and Fox Factory
Can any of the company-specific risk be diversified away by investing in both Aeye and Fox Factory 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 Fox Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Fox Factory Holding, you can compare the effects of market volatilities on Aeye and Fox Factory 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 Fox Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Fox Factory.
Diversification Opportunities for Aeye and Fox Factory
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aeye and Fox is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Fox Factory Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Factory Holding 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 Fox Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Factory Holding has no effect on the direction of Aeye i.e., Aeye and Fox Factory go up and down completely randomly.
Pair Corralation between Aeye and Fox Factory
Given the investment horizon of 90 days Aeye Inc is expected to generate 2.58 times more return on investment than Fox Factory. However, Aeye is 2.58 times more volatile than Fox Factory Holding. It trades about 0.25 of its potential returns per unit of risk. Fox Factory Holding is currently generating about -0.1 per unit of risk. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. Fox Factory Holding
Performance |
| Timeline |
| Aeye Inc |
| Fox Factory Holding |
Aeye and Fox Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Fox Factory
The main advantage of trading using opposite Aeye and Fox Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Fox Factory 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 Fox Factory will offset losses from the drop in Fox Factory's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Quantumscape Corp | Aeye vs. Hyliion Holdings Corp |
| Fox Factory vs. Dorman Products | Fox Factory vs. Malibu Boats | Fox Factory vs. Installed Building Products | Fox Factory vs. ExlService Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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