Correlation Between Aeva Technologies and Foresight Autonomous

Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Foresight Autonomous 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 Aeva Technologies and Foresight Autonomous into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeva Technologies and Foresight Autonomous Holdings, you can compare the effects of market volatilities on Aeva Technologies and Foresight Autonomous 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 Aeva Technologies with a short position of Foresight Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Foresight Autonomous.

Diversification Opportunities for Aeva Technologies and Foresight Autonomous

-0.71

Correlation Coefficient

Aeva Technologies  Foresight Autonomous

Pay attention - limited upside

The 3 months correlation between Aeva and Foresight is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Foresight Autonomous Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Autonomous and Aeva Technologies 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 Aeva Technologies are associated (or correlated) with Foresight Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Autonomous has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Foresight Autonomous go up and down completely randomly.

Pair Corralation between Aeva Technologies and Foresight Autonomous

Given the investment horizon of 90 days Aeva Technologies is expected to generate 1.34 times more return on investment than Foresight Autonomous. However, Aeva Technologies is 1.34 times more volatile than Foresight Autonomous Holdings. It trades about 0.24 of its potential returns per unit of risk. Foresight Autonomous Holdings is currently generating about 0.08 per unit of risk. If you would invest  368.00  in Aeva Technologies on September 1, 2024 and sell it today you would earn a total of  92.00  from holding Aeva Technologies or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aeva Technologies  vs.  Foresight Autonomous Holdings

Aeva Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeva Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Foresight Autonomous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foresight Autonomous Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aeva Technologies and Foresight Autonomous

The main advantage of trading using opposite Aeva Technologies and Foresight Autonomous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies position performs unexpectedly, Foresight Autonomous 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 Foresight Autonomous will offset losses from the drop in Foresight Autonomous' long position.

The idea behind Aeva Technologies and Foresight Autonomous Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.