Correlation Between Mobileye Global and Affiliated Resources

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

Diversification Opportunities for Mobileye Global and Affiliated Resources

0.15

Correlation Coefficient

Mobileye Global  Affiliated Resources

Average diversification

The 3 months correlation between Mobileye and Affiliated is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp 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 Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of Mobileye Global i.e., Mobileye Global and Affiliated Resources go up and down completely randomly.

Pair Corralation between Mobileye Global and Affiliated Resources

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Affiliated Resources. But the stock apears to be less risky and, when comparing its historical volatility, Mobileye Global Class is 3.26 times less risky than Affiliated Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Affiliated Resources Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.99  in Affiliated Resources Corp on December 4, 2024 and sell it today you would lose (3.49) from holding Affiliated Resources Corp or give up 38.82% of portfolio value over 90 days.

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

Mobileye Global Class  vs.  Affiliated Resources Corp

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 latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Affiliated Resources Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Affiliated Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobileye Global and Affiliated Resources

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

The idea behind Mobileye Global Class and Affiliated Resources Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..