Correlation Between AEye and Global Blue
Can any of the company-specific risk be diversified away by investing in both AEye and Global Blue 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 Global Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and Global Blue Group, you can compare the effects of market volatilities on AEye and Global Blue 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 Global Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and Global Blue.
Diversification Opportunities for AEye and Global Blue
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AEye and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and Global Blue Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blue Group 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 Global Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blue Group has no effect on the direction of AEye i.e., AEye and Global Blue go up and down completely randomly.
Pair Corralation between AEye and Global Blue
Assuming the 90 days horizon AEye Inc is expected to generate 4.53 times more return on investment than Global Blue. However, AEye is 4.53 times more volatile than Global Blue Group. It trades about 0.17 of its potential returns per unit of risk. Global Blue Group is currently generating about 0.18 per unit of risk. If you would invest 1.50 in AEye Inc on September 18, 2024 and sell it today you would earn a total of 0.61 from holding AEye Inc or generate 40.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEye Inc vs. Global Blue Group
Performance |
| Timeline |
| AEye Inc |
| Global Blue Group |
AEye and Global Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and Global Blue
The main advantage of trading using opposite AEye and Global Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye position performs unexpectedly, Global Blue 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 Global Blue will offset losses from the drop in Global Blue's long position.| AEye vs. Innoviz Technologies | AEye vs. Luminar Technologies | AEye vs. Quantumscape Corp | AEye vs. Hyliion Holdings Corp |
| Global Blue vs. Evertec | Global Blue vs. NetScout Systems | Global Blue vs. CSG Systems International | Global Blue vs. Tenable Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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