Correlation Between CT Real and Aeye

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

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

Diversification Opportunities for CT Real and Aeye

0.46

Correlation Coefficient

CT Real  Aeye

Very weak diversification

The 3 months correlation between CTRRF and Aeye is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and CT Real 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 CT Real Estate 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 CT Real i.e., CT Real and Aeye go up and down completely randomly.

Pair Corralation between CT Real and Aeye

If you would invest  108.00  in Aeye Inc on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Aeye Inc or generate 4.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

CT Real Estate  vs.  Aeye Inc

CT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CT Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Aeye Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeye Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Aeye is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CT Real and Aeye

The main advantage of trading using opposite CT Real and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CT Real 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.

The idea behind CT Real Estate and Aeye Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.