Correlation Between Mobileye Global and Astra International

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

Diversification Opportunities for Mobileye Global and Astra International

-0.48

Correlation Coefficient

Mobileye Global  Astra International

Very good diversification

The 3 months correlation between Mobileye and Astra is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Mobileye Global i.e., Mobileye Global and Astra International go up and down completely randomly.

Pair Corralation between Mobileye Global and Astra International

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 2.28 times more return on investment than Astra International. However, Mobileye Global is 2.28 times more volatile than Astra International Tbk. It trades about 0.17 of its potential returns per unit of risk. Astra International Tbk is currently generating about 0.01 per unit of risk. If you would invest  1,091  in Mobileye Global Class on September 13, 2024 and sell it today you would earn a total of  613.00  from holding Mobileye Global Class or generate 56.19% 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.  Astra International Tbk

Mobileye Global Class

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 13 (%) 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.

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mobileye Global and Astra International

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

The idea behind Mobileye Global Class and Astra International Tbk 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.