Correlation Between Mobileye Global and Sinosun Tech

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

Diversification Opportunities for Mobileye Global and Sinosun Tech

0.75

Correlation Coefficient

Mobileye Global  Sinosun Tech

Poor diversification

The 3 months correlation between Mobileye and Sinosun is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Sinosun Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosun Tech 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 Sinosun Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosun Tech has no effect on the direction of Mobileye Global i.e., Mobileye Global and Sinosun Tech go up and down completely randomly.

Pair Corralation between Mobileye Global and Sinosun Tech

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 0.9 times more return on investment than Sinosun Tech. However, Mobileye Global Class is 1.11 times less risky than Sinosun Tech. It trades about -0.08 of its potential returns per unit of risk. Sinosun Tech is currently generating about -0.08 per unit of risk. If you would invest  1,947  in Mobileye Global Class on December 25, 2024 and sell it today you would lose (421.00) from holding Mobileye Global Class or give up 21.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.61%
Values	Daily Returns

Mobileye Global Class  vs.  Sinosun Tech

Mobileye Global Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobileye Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sinosun Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinosun Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mobileye Global and Sinosun Tech

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

The idea behind Mobileye Global Class and Sinosun Tech 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.