Correlation Between Mobileye Global and Federated Muni

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

Diversification Opportunities for Mobileye Global and Federated Muni

0.22

Correlation Coefficient

Mobileye Global  Federated Muni

Modest diversification

The 3 months correlation between Mobileye and Federated is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Federated Muni And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Muni And 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 Federated Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Muni And has no effect on the direction of Mobileye Global i.e., Mobileye Global and Federated Muni go up and down completely randomly.

Pair Corralation between Mobileye Global and Federated Muni

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 11.77 times more return on investment than Federated Muni. However, Mobileye Global is 11.77 times more volatile than Federated Muni And. It trades about 0.18 of its potential returns per unit of risk. Federated Muni And is currently generating about -0.05 per unit of risk. If you would invest  1,651  in Mobileye Global Class on October 8, 2024 and sell it today you would earn a total of  519.00  from holding Mobileye Global Class or generate 31.44% return on investment over 90 days.

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

Mobileye Global Class  vs.  Federated Muni And

Mobileye Global Class

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.

Federated Muni And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Muni And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Federated Muni 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 Federated Muni

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

The idea behind Mobileye Global Class and Federated Muni And 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.