Correlation Between Aeye and Linamar
Can any of the company-specific risk be diversified away by investing in both Aeye and Linamar 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 Linamar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Linamar, you can compare the effects of market volatilities on Aeye and Linamar 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 Linamar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Linamar.
Diversification Opportunities for Aeye and Linamar
Very good diversification
The 3 months correlation between Aeye and Linamar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar 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 Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of Aeye i.e., Aeye and Linamar go up and down completely randomly.
Pair Corralation between Aeye and Linamar
Given the investment horizon of 90 days Aeye Inc is expected to generate 13.13 times more return on investment than Linamar. However, Aeye is 13.13 times more volatile than Linamar. It trades about 0.13 of its potential returns per unit of risk. Linamar is currently generating about 0.08 per unit of risk. If you would invest 100.00 in Aeye Inc on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Aeye Inc or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. Linamar
Performance |
| Timeline |
| Aeye Inc |
| Linamar |
Aeye and Linamar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Linamar
The main advantage of trading using opposite Aeye and Linamar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Linamar 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 Linamar will offset losses from the drop in Linamar's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
| Linamar vs. Dorman Products | Linamar vs. Standard Motor Products | Linamar vs. Motorcar Parts of | Linamar vs. Douglas Dynamics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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