Correlation Between Talkspace and AEye
Can any of the company-specific risk be diversified away by investing in both Talkspace 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 Talkspace and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talkspace and AEye Inc, you can compare the effects of market volatilities on Talkspace 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 Talkspace with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talkspace and AEye.
Diversification Opportunities for Talkspace and AEye
Average diversification
The 3 months correlation between Talkspace and AEye is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Talkspace and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and Talkspace 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 Talkspace 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 Talkspace i.e., Talkspace and AEye go up and down completely randomly.
Pair Corralation between Talkspace and AEye
Assuming the 90 days horizon Talkspace is expected to generate 1.14 times less return on investment than AEye. But when comparing it to its historical volatility, Talkspace is 1.31 times less risky than AEye. It trades about 0.06 of its potential returns per unit of risk. AEye Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.20 in AEye Inc on August 30, 2024 and sell it today you would lose (1.08) from holding AEye Inc or give up 49.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Talkspace vs. AEye Inc
Performance |
| Timeline |
| Talkspace |
| AEye Inc |
Talkspace and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talkspace and AEye
The main advantage of trading using opposite Talkspace and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talkspace 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.| Talkspace vs. Microvast Holdings | Talkspace vs. Taboola Ltd Warrant | Talkspace vs. Katapult Holdings Equity |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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