Correlation Between Upland Software and AudioEye

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

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

Diversification Opportunities for Upland Software and AudioEye

-0.43

Correlation Coefficient

Upland Software  AudioEye

Very good diversification

The 3 months correlation between Upland and AudioEye is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Upland Software and AudioEye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioEye and Upland Software 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 Upland Software 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 Upland Software i.e., Upland Software and AudioEye go up and down completely randomly.

Pair Corralation between Upland Software and AudioEye

Given the investment horizon of 90 days Upland Software is expected to generate 1.17 times more return on investment than AudioEye. However, Upland Software is 1.17 times more volatile than AudioEye. It trades about 0.13 of its potential returns per unit of risk. AudioEye is currently generating about -0.3 per unit of risk. If you would invest  375.00  in Upland Software on September 24, 2024 and sell it today you would earn a total of  58.00  from holding Upland Software or generate 15.47% return on investment over 90 days.

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

Upland Software  vs.  AudioEye

Upland Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upland Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Upland Software exhibited solid returns over the last few months and may actually be approaching a breakup point.

AudioEye

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Upland Software and AudioEye

The main advantage of trading using opposite Upland Software and AudioEye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upland Software 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 Upland Software 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.