Correlation Between AEye and ReNew Energy
Can any of the company-specific risk be diversified away by investing in both AEye and ReNew Energy 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 ReNew Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and ReNew Energy Global, you can compare the effects of market volatilities on AEye and ReNew Energy 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 ReNew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and ReNew Energy.
Diversification Opportunities for AEye and ReNew Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEye and ReNew is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and ReNew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReNew Energy Global 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 ReNew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReNew Energy Global has no effect on the direction of AEye i.e., AEye and ReNew Energy go up and down completely randomly.
Pair Corralation between AEye and ReNew Energy
Assuming the 90 days horizon AEye Inc is expected to generate 1.35 times more return on investment than ReNew Energy. However, AEye is 1.35 times more volatile than ReNew Energy Global. It trades about 0.12 of its potential returns per unit of risk. ReNew Energy Global is currently generating about 0.12 per unit of risk. If you would invest 1.00 in AEye Inc on August 30, 2024 and sell it today you would earn a total of 0.12 from holding AEye Inc or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AEye Inc vs. ReNew Energy Global
Performance |
| Timeline |
| AEye Inc |
| ReNew Energy Global |
AEye and ReNew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and ReNew Energy
The main advantage of trading using opposite AEye and ReNew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye position performs unexpectedly, ReNew Energy 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 ReNew Energy will offset losses from the drop in ReNew Energy's long position.| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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