Correlation Between AEye and CiT
Can any of the company-specific risk be diversified away by investing in both AEye and CiT 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 CiT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and CiT Inc, you can compare the effects of market volatilities on AEye and CiT 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 CiT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and CiT.
Diversification Opportunities for AEye and CiT
Very good diversification
The 3 months correlation between AEye and CiT is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and CiT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CiT Inc 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 CiT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CiT Inc has no effect on the direction of AEye i.e., AEye and CiT go up and down completely randomly.
Pair Corralation between AEye and CiT
Assuming the 90 days horizon AEye Inc is expected to generate 9.62 times more return on investment than CiT. However, AEye is 9.62 times more volatile than CiT Inc. It trades about 0.12 of its potential returns per unit of risk. CiT Inc is currently generating about 0.03 per unit of risk. If you would invest 2.10 in AEye Inc on August 31, 2024 and sell it today you would lose (0.90) from holding AEye Inc or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEye Inc vs. CiT Inc
Performance |
| Timeline |
| AEye Inc |
| CiT Inc |
AEye and CiT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and CiT
The main advantage of trading using opposite AEye and CiT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye position performs unexpectedly, CiT 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 CiT will offset losses from the drop in CiT's long position.| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
| CiT vs. Aquagold International | CiT vs. Thrivent High Yield | CiT vs. Morningstar Unconstrained Allocation | CiT vs. Via Renewables |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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