Correlation Between Mobileye Global and Fundamental Large

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

Diversification Opportunities for Mobileye Global and Fundamental Large

0.47

Correlation Coefficient

Mobileye Global  Fundamental Large

Very weak diversification

The 3 months correlation between Mobileye and Fundamental is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Fundamental Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Large Cap 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 Fundamental Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Large Cap has no effect on the direction of Mobileye Global i.e., Mobileye Global and Fundamental Large go up and down completely randomly.

Pair Corralation between Mobileye Global and Fundamental Large

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Fundamental Large. In addition to that, Mobileye Global is 4.11 times more volatile than Fundamental Large Cap. It trades about -0.08 of its total potential returns per unit of risk. Fundamental Large Cap is currently generating about -0.11 per unit of volatility. If you would invest  7,325  in Fundamental Large Cap on December 24, 2024 and sell it today you would lose (494.00) from holding Fundamental Large Cap or give up 6.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Mobileye Global Class  vs.  Fundamental Large Cap

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.

Fundamental Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fundamental Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Mobileye Global and Fundamental Large

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

The idea behind Mobileye Global Class and Fundamental Large Cap 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.