Correlation Between Mobileye Global and Fujian Green

Can any of the company-specific risk be diversified away by investing in both Mobileye Global and Fujian Green 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 Fujian Green 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 Fujian Green Pine, you can compare the effects of market volatilities on Mobileye Global and Fujian Green 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 Fujian Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and Fujian Green.

Diversification Opportunities for Mobileye Global and Fujian Green

0.23

Correlation Coefficient

Mobileye Global  Fujian Green

Modest diversification

The 3 months correlation between Mobileye and Fujian is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Fujian Green Pine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Green Pine 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 Fujian Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Green Pine has no effect on the direction of Mobileye Global i.e., Mobileye Global and Fujian Green go up and down completely randomly.

Pair Corralation between Mobileye Global and Fujian Green

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Fujian Green. In addition to that, Mobileye Global is 2.65 times more volatile than Fujian Green Pine. It trades about -0.12 of its total potential returns per unit of risk. Fujian Green Pine is currently generating about -0.12 per unit of volatility. If you would invest  525.00  in Fujian Green Pine on October 22, 2024 and sell it today you would lose (26.00) from holding Fujian Green Pine or give up 4.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Mobileye Global Class  vs.  Fujian Green Pine

Mobileye Global Class

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 7 (%) 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.

Fujian Green Pine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fujian Green Pine are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fujian Green is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mobileye Global and Fujian Green

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

The idea behind Mobileye Global Class and Fujian Green Pine 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.