Correlation Between Otonomo Technologies and AEye
Can any of the company-specific risk be diversified away by investing in both Otonomo Technologies 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 Otonomo Technologies and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otonomo Technologies and AEye Inc, you can compare the effects of market volatilities on Otonomo Technologies 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 Otonomo Technologies with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otonomo Technologies and AEye.
Diversification Opportunities for Otonomo Technologies and AEye
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Otonomo and AEye is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Otonomo Technologies and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and Otonomo Technologies 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 Otonomo Technologies 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 Otonomo Technologies i.e., Otonomo Technologies and AEye go up and down completely randomly.
Pair Corralation between Otonomo Technologies and AEye
If you would invest 1.20 in AEye Inc on August 27, 2024 and sell it today you would earn a total of 0.20 from holding AEye Inc or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Otonomo Technologies vs. AEye Inc
Performance |
| Timeline |
| Otonomo Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AEye Inc |
Otonomo Technologies and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otonomo Technologies and AEye
The main advantage of trading using opposite Otonomo Technologies and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otonomo Technologies 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.The idea behind Otonomo Technologies and AEye Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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