Correlation Between Canoo and Mobileye Global

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

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

Diversification Opportunities for Canoo and Mobileye Global

-0.92

Correlation Coefficient

Canoo  Mobileye Global

Pay attention - limited upside

The 3 months correlation between Canoo and Mobileye is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Inc and Mobileye Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileye Global Class and Canoo 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 Canoo Inc are associated (or correlated) with Mobileye Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileye Global Class has no effect on the direction of Canoo i.e., Canoo and Mobileye Global go up and down completely randomly.

Pair Corralation between Canoo and Mobileye Global

Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Mobileye Global. In addition to that, Canoo is 1.9 times more volatile than Mobileye Global Class. It trades about -0.17 of its total potential returns per unit of risk. Mobileye Global Class is currently generating about -0.03 per unit of volatility. If you would invest  3,172  in Mobileye Global Class on October 9, 2024 and sell it today you would lose (1,217) from holding Mobileye Global Class or give up 38.37% of portfolio value over 90 days.

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

Canoo Inc  vs.  Mobileye Global Class

Canoo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canoo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Mobileye Global Class

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canoo and Mobileye Global

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

The idea behind Canoo Inc and Mobileye Global Class 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.