Correlation Between Oblong and AudioEye

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

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

Diversification Opportunities for Oblong and AudioEye

0.74

Correlation Coefficient

Oblong  AudioEye

Poor diversification

The 3 months correlation between Oblong and AudioEye is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oblong Inc and AudioEye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioEye and Oblong 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 Oblong Inc 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 Oblong i.e., Oblong and AudioEye go up and down completely randomly.

Pair Corralation between Oblong and AudioEye

Given the investment horizon of 90 days Oblong Inc is expected to generate 0.82 times more return on investment than AudioEye. However, Oblong Inc is 1.22 times less risky than AudioEye. It trades about -0.05 of its potential returns per unit of risk. AudioEye is currently generating about -0.09 per unit of risk. If you would invest  412.00  in Oblong Inc on December 29, 2024 and sell it today you would lose (63.00) from holding Oblong Inc or give up 15.29% of portfolio value over 90 days.

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

Oblong Inc  vs.  AudioEye

Oblong Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oblong Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 Oblong and AudioEye

The main advantage of trading using opposite Oblong and AudioEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oblong 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 Oblong Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.