Correlation Between Mobileye Global and American Electric
Can any of the company-specific risk be diversified away by investing in both Mobileye Global and American Electric 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 American Electric 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 American Electric Power, you can compare the effects of market volatilities on Mobileye Global and American Electric 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 American Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and American Electric.
Diversification Opportunities for Mobileye Global and American Electric
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mobileye and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and American Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Electric Power 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 American Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Electric Power has no effect on the direction of Mobileye Global i.e., Mobileye Global and American Electric go up and down completely randomly.
Pair Corralation between Mobileye Global and American Electric
Given the investment horizon of 90 days Mobileye Global Class is expected to generate 4.71 times more return on investment than American Electric. However, Mobileye Global is 4.71 times more volatile than American Electric Power. It trades about 0.23 of its potential returns per unit of risk. American Electric Power is currently generating about 0.03 per unit of risk. If you would invest 1,224 in Mobileye Global Class on October 8, 2024 and sell it today you would earn a total of 946.00 from holding Mobileye Global Class or generate 77.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Mobileye Global Class vs. American Electric Power
Performance |
Timeline |
Mobileye Global Class |
American Electric Power |
Mobileye Global and American Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mobileye Global and American Electric
The main advantage of trading using opposite Mobileye Global and American Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global position performs unexpectedly, American Electric 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 American Electric will offset losses from the drop in American Electric's long position.Mobileye Global vs. AYRO Inc | Mobileye Global vs. Workhorse Group | Mobileye Global vs. Canoo Inc | Mobileye Global vs. GreenPower Motor |
American Electric vs. Wizz Air Holdings | American Electric vs. CHINA SOUTHN AIR H | American Electric vs. Federal Agricultural Mortgage | American Electric vs. AGRICULTBK HADR25 YC |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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