Correlation Between Mobileye Global and Yantai Jereh

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Can any of the company-specific risk be diversified away by investing in both Mobileye Global and Yantai Jereh 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 Mobileye Global and Yantai Jereh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobileye Global Class and Yantai Jereh Oilfield, you can compare the effects of market volatilities on Mobileye Global and Yantai Jereh 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 Mobileye Global with a short position of Yantai Jereh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and Yantai Jereh.

Diversification Opportunities for Mobileye Global and Yantai Jereh

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Mobileye and Yantai is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Yantai Jereh Oilfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai Jereh Oilfield and Mobileye Global 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 Mobileye Global Class are associated (or correlated) with Yantai Jereh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai Jereh Oilfield has no effect on the direction of Mobileye Global i.e., Mobileye Global and Yantai Jereh go up and down completely randomly.

Pair Corralation between Mobileye Global and Yantai Jereh

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 2.48 times more return on investment than Yantai Jereh. However, Mobileye Global is 2.48 times more volatile than Yantai Jereh Oilfield. It trades about 0.31 of its potential returns per unit of risk. Yantai Jereh Oilfield is currently generating about 0.07 per unit of risk. If you would invest  1,700  in Mobileye Global Class on October 7, 2024 and sell it today you would earn a total of  470.00  from holding Mobileye Global Class or generate 27.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Mobileye Global Class  vs.  Yantai Jereh Oilfield

 Performance 
       Timeline  
Mobileye Global Class 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 17 (%) 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.
Yantai Jereh Oilfield 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Yantai Jereh Oilfield are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yantai Jereh is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mobileye Global and Yantai Jereh Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mobileye Global and Yantai Jereh

The main advantage of trading using opposite Mobileye Global and Yantai Jereh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global position performs unexpectedly, Yantai Jereh 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 Yantai Jereh will offset losses from the drop in Yantai Jereh's long position.
The idea behind Mobileye Global Class and Yantai Jereh Oilfield 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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