Correlation Between Mobileye Global and CGN NEW

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

Diversification Opportunities for Mobileye Global and CGN NEW

0.1

Correlation Coefficient

Mobileye Global  CGN NEW

Average diversification

The 3 months correlation between Mobileye and CGN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and CGN NEW ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN NEW ENERGY 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 CGN NEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN NEW ENERGY has no effect on the direction of Mobileye Global i.e., Mobileye Global and CGN NEW go up and down completely randomly.

Pair Corralation between Mobileye Global and CGN NEW

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the CGN NEW. In addition to that, Mobileye Global is 1.98 times more volatile than CGN NEW ENERGY. It trades about -0.06 of its total potential returns per unit of risk. CGN NEW ENERGY is currently generating about -0.02 per unit of volatility. If you would invest  28.00  in CGN NEW ENERGY on December 20, 2024 and sell it today you would lose (1.00) from holding CGN NEW ENERGY or give up 3.57% 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.  CGN NEW ENERGY

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.

CGN NEW ENERGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days CGN NEW ENERGY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CGN NEW is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mobileye Global and CGN NEW

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

The idea behind Mobileye Global Class and CGN NEW ENERGY 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.