Correlation Between Zscaler and AEye
Can any of the company-specific risk be diversified away by investing in both Zscaler 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 Zscaler and AEye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zscaler and AEye Inc, you can compare the effects of market volatilities on Zscaler 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 Zscaler with a short position of AEye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zscaler and AEye.
Diversification Opportunities for Zscaler and AEye
Poor diversification
The 3 months correlation between Zscaler and AEye is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zscaler and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and Zscaler 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 Zscaler 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 Zscaler i.e., Zscaler and AEye go up and down completely randomly.
Pair Corralation between Zscaler and AEye
Allowing for the 90-day total investment horizon Zscaler is expected to under-perform the AEye. But the stock apears to be less risky and, when comparing its historical volatility, Zscaler is 8.07 times less risky than AEye. The stock trades about -0.01 of its potential returns per unit of risk. The AEye Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.50 in AEye Inc on September 19, 2024 and sell it today you would earn a total of 0.20 from holding AEye Inc or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zscaler vs. AEye Inc
Performance |
| Timeline |
| Zscaler |
| AEye Inc |
Zscaler and AEye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zscaler and AEye
The main advantage of trading using opposite Zscaler and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zscaler 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.| Zscaler vs. Global Blue Group | Zscaler vs. Aurora Mobile | Zscaler vs. Marqeta | Zscaler vs. Nextnav Acquisition Corp |
| AEye vs. Innoviz Technologies | AEye vs. Luminar Technologies | AEye vs. Quantumscape Corp | AEye vs. Hyliion Holdings Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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