Correlation Between Aeye and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Aeye and Boston Beer 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 Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Boston Beer, you can compare the effects of market volatilities on Aeye and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Boston Beer.
Diversification Opportunities for Aeye and Boston Beer
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeye and Boston is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Aeye i.e., Aeye and Boston Beer go up and down completely randomly.
Pair Corralation between Aeye and Boston Beer
Given the investment horizon of 90 days Aeye Inc is expected to under-perform the Boston Beer. In addition to that, Aeye is 3.02 times more volatile than Boston Beer. It trades about -0.23 of its total potential returns per unit of risk. Boston Beer is currently generating about 0.1 per unit of volatility. If you would invest 30,433 in Boston Beer on August 27, 2024 and sell it today you would earn a total of 847.00 from holding Boston Beer or generate 2.78% 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. Boston Beer
Performance |
| Timeline |
| Aeye Inc |
| Boston Beer |
Aeye and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Boston Beer
The main advantage of trading using opposite Aeye and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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