Correlation Between Aeye and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Aeye and Tyson Foods 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 Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Tyson Foods, you can compare the effects of market volatilities on Aeye and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Tyson Foods.
Diversification Opportunities for Aeye and Tyson Foods
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeye and Tyson is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Aeye i.e., Aeye and Tyson Foods go up and down completely randomly.
Pair Corralation between Aeye and Tyson Foods
Given the investment horizon of 90 days Aeye is expected to generate 16.17 times less return on investment than Tyson Foods. In addition to that, Aeye is 8.17 times more volatile than Tyson Foods. It trades about 0.0 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.08 per unit of volatility. If you would invest 4,986 in Tyson Foods on September 2, 2024 and sell it today you would earn a total of 1,464 from holding Tyson Foods or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. Tyson Foods
Performance |
| Timeline |
| Aeye Inc |
| Tyson Foods |
Aeye and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Tyson Foods
The main advantage of trading using opposite Aeye and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Aeye vs. Innoviz Technologies | Aeye vs. Hesai Group American | Aeye vs. Luminar Technologies | Aeye vs. Mobileye Global Class |
| Tyson Foods vs. Campbell Soup | Tyson Foods vs. ConAgra Foods | Tyson Foods vs. Hormel Foods | Tyson Foods vs. Kellanova |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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