Correlation Between Tyson Foods and Aeye
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Aeye Inc, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Aeye.
Diversification Opportunities for Tyson Foods and Aeye
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tyson and Aeye is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Aeye go up and down completely randomly.
Pair Corralation between Tyson Foods and Aeye
Considering the 90-day investment horizon Tyson Foods is expected to generate 0.12 times more return on investment than Aeye. However, Tyson Foods is 8.17 times less risky than Aeye. It trades about 0.08 of its potential returns per unit of risk. Aeye Inc is currently generating about 0.0 per unit of risk. If you would invest 4,986 in Tyson Foods on September 2, 2024 and sell it today you would earn a total of 1,464 from holding Tyson Foods or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Aeye Inc
Performance |
| Timeline |
| Tyson Foods |
| Aeye Inc |
Tyson Foods and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Aeye
The main advantage of trading using opposite Tyson Foods and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Campbell Soup | Tyson Foods vs. ConAgra Foods | Tyson Foods vs. Hormel Foods | Tyson Foods vs. Kellanova |
| Aeye vs. Innoviz Technologies | Aeye vs. Hesai Group American | Aeye vs. Luminar Technologies | 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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