Correlation Between Aeye and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Aeye and Xos Equity 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 Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Xos Equity Warrants, you can compare the effects of market volatilities on Aeye and Xos Equity 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 Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Xos Equity.
Diversification Opportunities for Aeye and Xos Equity
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeye and Xos is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants 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 Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Aeye i.e., Aeye and Xos Equity go up and down completely randomly.
Pair Corralation between Aeye and Xos Equity
Given the investment horizon of 90 days Aeye Inc is expected to under-perform the Xos Equity. But the stock apears to be less risky and, when comparing its historical volatility, Aeye Inc is 6.42 times less risky than Xos Equity. The stock trades about -0.01 of its potential returns per unit of risk. The Xos Equity Warrants is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.60 in Xos Equity Warrants on January 8, 2025 and sell it today you would lose (4.71) from holding Xos Equity Warrants or give up 84.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.14% |
| Values | Daily Returns |
Aeye Inc vs. Xos Equity Warrants
Performance |
| Timeline |
| Aeye Inc |
| Xos Equity Warrants |
Aeye and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Xos Equity
The main advantage of trading using opposite Aeye and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
| Xos Equity vs. Microvast Holdings | Xos Equity vs. EVgo Equity Warrants | Xos Equity vs. Xos Inc | Xos Equity vs. AEye Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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