Correlation Between Marine Products and Aeye
Can any of the company-specific risk be diversified away by investing in both Marine Products and Aeye 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 Marine Products and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Aeye Inc, you can compare the effects of market volatilities on Marine Products and Aeye 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 Marine Products with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Aeye.
Diversification Opportunities for Marine Products and Aeye
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marine and Aeye is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Marine Products 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 Marine Products are associated (or correlated) with Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Marine Products i.e., Marine Products and Aeye go up and down completely randomly.
Pair Corralation between Marine Products and Aeye
Considering the 90-day investment horizon Marine Products is expected to generate 1.08 times less return on investment than Aeye. But when comparing it to its historical volatility, Marine Products is 2.99 times less risky than Aeye. It trades about 0.18 of its potential returns per unit of risk. Aeye Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 108.00 in Aeye Inc on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Aeye Inc or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Aeye Inc
Performance |
| Timeline |
| Marine Products |
| Aeye Inc |
Marine Products and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Aeye
The main advantage of trading using opposite Marine Products and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye's long position.| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor Industries |
| Aeye vs. Innoviz Technologies | Aeye vs. Hesai Group American | Aeye vs. Luminar Technologies | Aeye vs. Mobileye Global Class |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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