Correlation Between Marketing Worldwide and Aeye
Can any of the company-specific risk be diversified away by investing in both Marketing Worldwide 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 Marketing Worldwide and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marketing Worldwide and Aeye Inc, you can compare the effects of market volatilities on Marketing Worldwide 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 Marketing Worldwide with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marketing Worldwide and Aeye.
Diversification Opportunities for Marketing Worldwide and Aeye
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marketing and Aeye is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marketing Worldwide and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Marketing Worldwide 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 Marketing Worldwide 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 Marketing Worldwide i.e., Marketing Worldwide and Aeye go up and down completely randomly.
Pair Corralation between Marketing Worldwide and Aeye
Given the investment horizon of 90 days Marketing Worldwide is expected to generate 6.65 times more return on investment than Aeye. However, Marketing Worldwide is 6.65 times more volatile than Aeye Inc. It trades about 0.22 of its potential returns per unit of risk. Aeye Inc is currently generating about -0.24 per unit of risk. If you would invest 0.01 in Marketing Worldwide on November 28, 2024 and sell it today you would earn a total of 0.01 from holding Marketing Worldwide or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marketing Worldwide vs. Aeye Inc
Performance |
| Timeline |
| Marketing Worldwide |
| Aeye Inc |
Marketing Worldwide and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marketing Worldwide and Aeye
The main advantage of trading using opposite Marketing Worldwide and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marketing Worldwide 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.| Marketing Worldwide vs. Continental Aktiengesellschaft | Marketing Worldwide vs. ECARX Holdings Warrants | Marketing Worldwide vs. Service Team | Marketing Worldwide vs. Compagnie Gnrale des |
| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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