Correlation Between AEye and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both AEye and Teradata Corp 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 Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEye Inc and Teradata Corp, you can compare the effects of market volatilities on AEye and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and Teradata Corp.
Diversification Opportunities for AEye and Teradata Corp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEye and Teradata is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of AEye i.e., AEye and Teradata Corp go up and down completely randomly.
Pair Corralation between AEye and Teradata Corp
Assuming the 90 days horizon AEye Inc is expected to generate 6.96 times more return on investment than Teradata Corp. However, AEye is 6.96 times more volatile than Teradata Corp. It trades about 0.06 of its potential returns per unit of risk. Teradata Corp is currently generating about 0.0 per unit of risk. If you would invest 2.20 in AEye Inc on August 31, 2024 and sell it today you would lose (1.00) from holding AEye Inc or give up 45.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEye Inc vs. Teradata Corp
Performance |
| Timeline |
| AEye Inc |
| Teradata Corp |
AEye and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEye and Teradata Corp
The main advantage of trading using opposite AEye and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEye position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| AEye vs. Faraday Future Intelligent | AEye vs. Innoviz Technologies | AEye vs. Aeye Inc | AEye vs. Xos Equity Warrants |
| Teradata Corp vs. EverCommerce | Teradata Corp vs. i3 Verticals | Teradata Corp vs. Global Blue Group | Teradata Corp vs. Evertec |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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