Correlation Between Mobileye Global and Midcap Growth

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

Diversification Opportunities for Mobileye Global and Midcap Growth

-0.44

Correlation Coefficient

Mobileye Global  Midcap Growth

Very good diversification

The 3 months correlation between Mobileye and Midcap is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Mobileye Global i.e., Mobileye Global and Midcap Growth go up and down completely randomly.

Pair Corralation between Mobileye Global and Midcap Growth

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 0.34 times more return on investment than Midcap Growth. However, Mobileye Global Class is 2.98 times less risky than Midcap Growth. It trades about 0.29 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about -0.25 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  434.00  from holding Mobileye Global Class or generate 24.79% return on investment over 90 days.

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

Mobileye Global Class  vs.  Midcap Growth Fund

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.

Midcap Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Midcap Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Mobileye Global and Midcap Growth

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

The idea behind Mobileye Global Class and Midcap Growth Fund 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.