Correlation Between Aeye and Superior Industries

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

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

Diversification Opportunities for Aeye and Superior Industries

0.01

Correlation Coefficient

Aeye  Superior Industries

Significant diversification

The 3 months correlation between Aeye and Superior is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries and Aeye 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 Aeye Inc are associated (or correlated) with Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Aeye i.e., Aeye and Superior Industries go up and down completely randomly.

Pair Corralation between Aeye and Superior Industries

Given the investment horizon of 90 days Aeye Inc is expected to under-perform the Superior Industries. In addition to that, Aeye is 2.15 times more volatile than Superior Industries International. It trades about -0.1 of its total potential returns per unit of risk. Superior Industries International is currently generating about 0.05 per unit of volatility. If you would invest  200.00  in Superior Industries International on December 28, 2024 and sell it today you would earn a total of  16.00  from holding Superior Industries International or generate 8.0% return on investment over 90 days.

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

Aeye Inc  vs.  Superior Industries Internatio

Aeye Inc

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Superior Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Industries International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Superior Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeye and Superior Industries

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

The idea behind Aeye Inc and Superior Industries International 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 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.