Correlation Between Aeye and JPMorgan Fundamental

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

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

Diversification Opportunities for Aeye and JPMorgan Fundamental

0.46

Correlation Coefficient

Aeye  JPMorgan Fundamental

Very weak diversification

The 3 months correlation between Aeye and JPMorgan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and JPMorgan Fundamental Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Fundamental Data 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 JPMorgan Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Fundamental Data has no effect on the direction of Aeye i.e., Aeye and JPMorgan Fundamental go up and down completely randomly.

Pair Corralation between Aeye and JPMorgan Fundamental

Given the investment horizon of 90 days Aeye Inc is expected to generate 17.22 times more return on investment than JPMorgan Fundamental. However, Aeye is 17.22 times more volatile than JPMorgan Fundamental Data. It trades about 0.04 of its potential returns per unit of risk. JPMorgan Fundamental Data is currently generating about 0.29 per unit of risk. If you would invest  127.00  in Aeye Inc on July 5, 2024 and sell it today you would lose (12.00) from holding Aeye Inc or give up 9.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	32.8%
Values	Daily Returns

Aeye Inc  vs.  JPMorgan Fundamental Data

Aeye Inc

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in November 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

JPMorgan Fundamental Data

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Fundamental Data are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, JPMorgan Fundamental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeye and JPMorgan Fundamental

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

The idea behind Aeye Inc and JPMorgan Fundamental Data 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.