Correlation Between Mobileye Global and Hammer Metals

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

Diversification Opportunities for Mobileye Global and Hammer Metals

-0.76

Correlation Coefficient

Mobileye Global  Hammer Metals

Pay attention - limited upside

The 3 months correlation between Mobileye and Hammer is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals 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 Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of Mobileye Global i.e., Mobileye Global and Hammer Metals go up and down completely randomly.

Pair Corralation between Mobileye Global and Hammer Metals

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 0.92 times more return on investment than Hammer Metals. However, Mobileye Global Class is 1.09 times less risky than Hammer Metals. It trades about 0.28 of its potential returns per unit of risk. Hammer Metals is currently generating about -0.05 per unit of risk. If you would invest  1,751  in Mobileye Global Class on October 8, 2024 and sell it today you would earn a total of  419.00  from holding Mobileye Global Class or generate 23.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Mobileye Global Class  vs.  Hammer Metals

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.

Hammer Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hammer Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mobileye Global and Hammer Metals

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

The idea behind Mobileye Global Class and Hammer Metals 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 Transaction History module to view history of all your transactions and understand their impact on performance.