Correlation Between GreenLight Biosciences and AEye

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

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

Diversification Opportunities for GreenLight Biosciences and AEye

0.0

Correlation Coefficient

GreenLight Biosciences  AEye

Pay attention - limited upside

The 3 months correlation between GreenLight and AEye is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GreenLight Biosciences Holding and AEye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEye Inc and GreenLight Biosciences 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 GreenLight Biosciences Holdings 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 GreenLight Biosciences i.e., GreenLight Biosciences and AEye go up and down completely randomly.

Pair Corralation between GreenLight Biosciences and AEye

If you would invest  8.05  in AEye Inc on December 30, 2024 and sell it today you would lose (1.93) from holding AEye Inc or give up 23.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GreenLight Biosciences Holding  vs.  AEye Inc

GreenLight Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenLight Biosciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, GreenLight Biosciences is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AEye Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AEye Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AEye showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenLight Biosciences and AEye

The main advantage of trading using opposite GreenLight Biosciences and AEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenLight Biosciences 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 GreenLight Biosciences Holdings 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.