Correlation Between AEye and Origin Materials
Can any of the company-specific risk be diversified away by investing in both AEye and Origin Materials 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 Origin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and Origin Materials Warrant, you can compare the effects of market volatilities on AEye and Origin Materials 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 Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and Origin Materials.
Diversification Opportunities for AEye and Origin Materials
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AEye and Origin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and Origin Materials Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials Warrant 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 Origin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Materials Warrant has no effect on the direction of AEye i.e., AEye and Origin Materials go up and down completely randomly.
Pair Corralation between AEye and Origin Materials
Assuming the 90 days horizon AEye Inc is expected to generate 1.41 times more return on investment than Origin Materials. However, AEye is 1.41 times more volatile than Origin Materials Warrant. It trades about 0.09 of its potential returns per unit of risk. Origin Materials Warrant is currently generating about 0.1 per unit of risk. If you would invest 8.20 in AEye Inc on November 3, 2024 and sell it today you would lose (0.50) from holding AEye Inc or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
AEye Inc vs. Origin Materials Warrant
Performance |
| Timeline |
| AEye Inc |
| Origin Materials Warrant |
AEye and Origin Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and Origin Materials
The main advantage of trading using opposite AEye and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye position performs unexpectedly, Origin Materials 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 Origin Materials will offset losses from the drop in Origin Materials' long position.| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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