Correlation Between Mobileye Global and Mullen Automotive

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

Diversification Opportunities for Mobileye Global and Mullen Automotive

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Mobileye and Mullen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive 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 Mullen Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Automotive has no effect on the direction of Mobileye Global i.e., Mobileye Global and Mullen Automotive go up and down completely randomly.

Pair Corralation between Mobileye Global and Mullen Automotive

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 0.67 times more return on investment than Mullen Automotive. However, Mobileye Global Class is 1.49 times less risky than Mullen Automotive. It trades about 0.03 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.51 per unit of risk. If you would invest  1,698  in Mobileye Global Class on October 11, 2024 and sell it today you would lose (3.00) from holding Mobileye Global Class or give up 0.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mobileye Global Class  vs.  Mullen Automotive

 Performance 
       Timeline  
Mobileye Global Class 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.
Mullen Automotive 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mullen Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mobileye Global and Mullen Automotive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mobileye Global and Mullen Automotive

The main advantage of trading using opposite Mobileye Global and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global position performs unexpectedly, Mullen Automotive 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 Mullen Automotive will offset losses from the drop in Mullen Automotive's long position.
The idea behind Mobileye Global Class and Mullen Automotive 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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