Correlation Between Sypris Solutions and Aeye
Can any of the company-specific risk be diversified away by investing in both Sypris Solutions 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 Sypris Solutions and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sypris Solutions and Aeye Inc, you can compare the effects of market volatilities on Sypris Solutions 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 Sypris Solutions with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sypris Solutions and Aeye.
Diversification Opportunities for Sypris Solutions and Aeye
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sypris and Aeye is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sypris Solutions and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Sypris Solutions 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 Sypris Solutions 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 Sypris Solutions i.e., Sypris Solutions and Aeye go up and down completely randomly.
Pair Corralation between Sypris Solutions and Aeye
Given the investment horizon of 90 days Sypris Solutions is expected to generate 0.75 times more return on investment than Aeye. However, Sypris Solutions is 1.34 times less risky than Aeye. It trades about 0.12 of its potential returns per unit of risk. Aeye Inc is currently generating about 0.05 per unit of risk. If you would invest 136.00 in Sypris Solutions on November 1, 2024 and sell it today you would earn a total of 83.40 from holding Sypris Solutions or generate 61.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sypris Solutions vs. Aeye Inc
Performance |
| Timeline |
| Sypris Solutions |
| Aeye Inc |
Sypris Solutions and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sypris Solutions and Aeye
The main advantage of trading using opposite Sypris Solutions and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sypris Solutions 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.| Sypris Solutions vs. Monro Muffler Brake | Sypris Solutions vs. Magna International | Sypris Solutions vs. BorgWarner | Sypris Solutions vs. Mobileye Global Class |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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