Correlation Between AEye and Lilium Equity

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

By analyzing existing cross correlation between AEye Inc and Lilium Equity Warrants, you can compare the effects of market volatilities on AEye and Lilium Equity 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 Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEye and Lilium Equity.

Diversification Opportunities for AEye and Lilium Equity

0.0

Correlation Coefficient

AEye  Lilium Equity

Pay attention - limited upside

The 3 months correlation between AEye and Lilium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and Lilium Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lilium Equity Warrants 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 Lilium Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lilium Equity Warrants has no effect on the direction of AEye i.e., AEye and Lilium Equity go up and down completely randomly.

Pair Corralation between AEye and Lilium Equity

If you would invest  8.05  in AEye Inc on December 28, 2024 and sell it today you would lose (1.80) from holding AEye Inc or give up 22.36% of portfolio value over 90 days.

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

AEye Inc  vs.  Lilium Equity Warrants

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.

Lilium Equity Warrants

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AEye and Lilium Equity

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

The idea behind AEye Inc and Lilium Equity Warrants 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.