Correlation Between Aeye and Service Team

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Can any of the company-specific risk be diversified away by investing in both Aeye and Service Team 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 Service Team into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Service Team, you can compare the effects of market volatilities on Aeye and Service Team 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 Service Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Service Team.

Diversification Opportunities for Aeye and Service Team

AeyeServiceDiversified AwayAeyeServiceDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aeye and Service is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Service Team in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Team 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 Service Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Team has no effect on the direction of Aeye i.e., Aeye and Service Team go up and down completely randomly.

Pair Corralation between Aeye and Service Team

If you would invest  0.01  in Service Team on November 27, 2024 and sell it today you would earn a total of  0.00  from holding Service Team or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Aeye Inc  vs.  Service Team

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 050100150200
JavaScript chart by amCharts 3.21.15LIDR SVTE
       Timeline  
Aeye Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Aeye Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Aeye is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.522.533.54
Service Team 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Service Team has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Service Team is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00010.0001050.000110.000115

Aeye and Service Team Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-42.5-31.83-21.16-10.490.1810.7821.5732.3543.13 0.00050.00100.00150.0020
JavaScript chart by amCharts 3.21.15LIDR SVTE
       Returns  

Pair Trading with Aeye and Service Team

The main advantage of trading using opposite Aeye and Service Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Service Team 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 Service Team will offset losses from the drop in Service Team's long position.
The idea behind Aeye Inc and Service Team pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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