Correlation Between Infobird and AudioEye

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

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

Diversification Opportunities for Infobird and AudioEye

0.56

Correlation Coefficient

Infobird  AudioEye

Very weak diversification

The 3 months correlation between Infobird and AudioEye is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Infobird Co and AudioEye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioEye and Infobird 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 Infobird Co are associated (or correlated) with AudioEye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioEye has no effect on the direction of Infobird i.e., Infobird and AudioEye go up and down completely randomly.

Pair Corralation between Infobird and AudioEye

Given the investment horizon of 90 days Infobird Co is expected to under-perform the AudioEye. In addition to that, Infobird is 1.04 times more volatile than AudioEye. It trades about -0.15 of its total potential returns per unit of risk. AudioEye is currently generating about -0.09 per unit of volatility. If you would invest  1,562  in AudioEye on December 30, 2024 and sell it today you would lose (436.00) from holding AudioEye or give up 27.91% of portfolio value over 90 days.

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

Infobird Co  vs.  AudioEye

Infobird

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infobird Co 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 fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AudioEye

Risk-Adjusted Performance

Very Weak

Over the last 90 days AudioEye has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Infobird and AudioEye

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

The idea behind Infobird Co and AudioEye 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.