Correlation Between AEye and STRCW Old

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

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

Diversification Opportunities for AEye and STRCW Old

-0.58

Correlation Coefficient

AEye  STRCW Old

Excellent diversification

The 3 months correlation between AEye and STRCW is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AEye Inc and STRCW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRCW Old 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 STRCW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRCW Old has no effect on the direction of AEye i.e., AEye and STRCW Old go up and down completely randomly.

Pair Corralation between AEye and STRCW Old

If you would invest  0.70  in AEye Inc on October 25, 2024 and sell it today you would earn a total of  7.10  from holding AEye Inc or generate 1014.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.67%
Values	Daily Returns

AEye Inc  vs.  STRCW Old

AEye Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AEye Inc are ranked lower than 20 (%) 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.

STRCW Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AEye and STRCW Old

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

The idea behind AEye Inc and STRCW Old 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 CEOs Directory module to screen CEOs from public companies around the world.