Correlation Between AudioEye and Intellinetics

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

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

Diversification Opportunities for AudioEye and Intellinetics

0.57

Correlation Coefficient

AudioEye  Intellinetics

Very weak diversification

The 3 months correlation between AudioEye and Intellinetics is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AudioEye and Intellinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellinetics and AudioEye 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 AudioEye are associated (or correlated) with Intellinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellinetics has no effect on the direction of AudioEye i.e., AudioEye and Intellinetics go up and down completely randomly.

Pair Corralation between AudioEye and Intellinetics

Given the investment horizon of 90 days AudioEye is expected to generate 1.55 times less return on investment than Intellinetics. In addition to that, AudioEye is 1.15 times more volatile than Intellinetics. It trades about 0.09 of its total potential returns per unit of risk. Intellinetics is currently generating about 0.16 per unit of volatility. If you would invest  1,018  in Intellinetics on August 31, 2024 and sell it today you would earn a total of  517.00  from holding Intellinetics or generate 50.79% return on investment over 90 days.

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

AudioEye  vs.  Intellinetics

AudioEye

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AudioEye are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AudioEye exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intellinetics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intellinetics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Intellinetics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AudioEye and Intellinetics

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

The idea behind AudioEye and Intellinetics 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.