Correlation Between 00165CAP9 and Aeye

Can any of the company-specific risk be diversified away by investing in both 00165CAP9 and Aeye 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 00165CAP9 and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMC ENTMT HLDGS and Aeye Inc, you can compare the effects of market volatilities on 00165CAP9 and Aeye 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 00165CAP9 with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00165CAP9 and Aeye.

Diversification Opportunities for 00165CAP9 and Aeye

0.12

Correlation Coefficient

00165CAP9  Aeye

Average diversification

The 3 months correlation between 00165CAP9 and Aeye is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding AMC ENTMT HLDGS and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and 00165CAP9 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 AMC ENTMT HLDGS are associated (or correlated) with Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of 00165CAP9 i.e., 00165CAP9 and Aeye go up and down completely randomly.

Pair Corralation between 00165CAP9 and Aeye

Assuming the 90 days trading horizon AMC ENTMT HLDGS is expected to under-perform the Aeye. But the bond apears to be less risky and, when comparing its historical volatility, AMC ENTMT HLDGS is 23.84 times less risky than Aeye. The bond trades about -0.12 of its potential returns per unit of risk. The Aeye Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  107.00  in Aeye Inc on December 1, 2024 and sell it today you would lose (44.00) from holding Aeye Inc or give up 41.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

AMC ENTMT HLDGS  vs.  Aeye Inc

AMC ENTMT HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMC ENTMT HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00165CAP9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 relatively invariable fundamental indicators, Aeye is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 00165CAP9 and Aeye

The main advantage of trading using opposite 00165CAP9 and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00165CAP9 position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye's long position.

The idea behind AMC ENTMT HLDGS and Aeye Inc 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.