Correlation Between Microvast Holdings and AEye
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings 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 Microvast Holdings and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and AEye Inc, you can compare the effects of market volatilities on Microvast Holdings 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 Microvast Holdings with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and AEye.
Diversification Opportunities for Microvast Holdings and AEye
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Microvast and AEye is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings i.e., Microvast Holdings and AEye go up and down completely randomly.
Pair Corralation between Microvast Holdings and AEye
Assuming the 90 days horizon Microvast Holdings is expected to generate 1.64 times more return on investment than AEye. However, Microvast Holdings is 1.64 times more volatile than AEye Inc. It trades about 0.25 of its potential returns per unit of risk. AEye Inc is currently generating about 0.18 per unit of risk. If you would invest 2.00 in Microvast Holdings on August 25, 2024 and sell it today you would earn a total of 5.12 from holding Microvast Holdings or generate 256.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microvast Holdings vs. AEye Inc
Performance |
| Timeline |
| Microvast Holdings |
| AEye Inc |
Microvast Holdings and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and AEye
The main advantage of trading using opposite Microvast Holdings and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings 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.| Microvast Holdings vs. Microvast Holdings | Microvast Holdings vs. EVgo Equity Warrants | Microvast Holdings vs. Paysafe Ltd Wt | Microvast Holdings vs. Faraday Future Intelligent |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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