Correlation Between Aeye and Nt International

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

By analyzing existing cross correlation between Aeye Inc and Nt International Small Mid, you can compare the effects of market volatilities on Aeye and Nt International 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 Nt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Nt International.

Diversification Opportunities for Aeye and Nt International

0.77

Correlation Coefficient

Aeye  Nt International

Poor diversification

The 3 months correlation between Aeye and ANTMX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Nt International Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nt International Small 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 Nt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nt International Small has no effect on the direction of Aeye i.e., Aeye and Nt International go up and down completely randomly.

Pair Corralation between Aeye and Nt International

Given the investment horizon of 90 days Aeye Inc is expected to under-perform the Nt International. In addition to that, Aeye is 6.94 times more volatile than Nt International Small Mid. It trades about -0.5 of its total potential returns per unit of risk. Nt International Small Mid is currently generating about -0.18 per unit of volatility. If you would invest  1,041  in Nt International Small Mid on April 4, 2024 and sell it today you would lose (30.00) from holding Nt International Small Mid or give up 2.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Aeye Inc  vs.  Nt International Small Mid

Aeye Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeye Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Aeye reported solid returns over the last few months and may actually be approaching a breakup point.

Nt International Small

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nt International Small Mid are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Nt International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aeye and Nt International

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

The idea behind Aeye Inc and Nt International Small Mid 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.