Correlation Between Xos Equity and AEye
Can any of the company-specific risk be diversified away by investing in both Xos Equity 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 Xos Equity and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Equity Warrants and AEye Inc, you can compare the effects of market volatilities on Xos Equity 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 Xos Equity with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and AEye.
Diversification Opportunities for Xos Equity and AEye
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xos and AEye is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and Xos Equity 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 Xos Equity Warrants 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 Xos Equity i.e., Xos Equity and AEye go up and down completely randomly.
Pair Corralation between Xos Equity and AEye
Assuming the 90 days horizon Xos Equity Warrants is expected to generate 1.04 times more return on investment than AEye. However, Xos Equity is 1.04 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 0.09 per unit of risk. If you would invest 0.56 in Xos Equity Warrants on November 3, 2024 and sell it today you would earn a total of 0.44 from holding Xos Equity Warrants or generate 78.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Xos Equity Warrants vs. AEye Inc
Performance |
| Timeline |
| Xos Equity Warrants |
| AEye Inc |
Xos Equity and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos Equity and AEye
The main advantage of trading using opposite Xos Equity and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity 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.| Xos Equity vs. Microvast Holdings | Xos Equity vs. EVgo Equity Warrants | Xos Equity vs. Faraday Future Intelligent | Xos Equity vs. Xos Inc |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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