Correlation Between Mobileye Global and Putnam Small

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

Diversification Opportunities for Mobileye Global and Putnam Small

0.06

Correlation Coefficient

Mobileye Global  Putnam Small

Significant diversification

The 3 months correlation between Mobileye and Putnam is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Putnam Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Small 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 Putnam Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Small Cap has no effect on the direction of Mobileye Global i.e., Mobileye Global and Putnam Small go up and down completely randomly.

Pair Corralation between Mobileye Global and Putnam Small

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 3.16 times more return on investment than Putnam Small. However, Mobileye Global is 3.16 times more volatile than Putnam Small Cap. It trades about 0.23 of its potential returns per unit of risk. Putnam Small Cap is currently generating about -0.02 per unit of risk. If you would invest  1,224  in Mobileye Global Class on October 8, 2024 and sell it today you would earn a total of  946.00  from holding Mobileye Global Class or generate 77.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mobileye Global Class  vs.  Putnam Small Cap

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.

Putnam Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Putnam Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mobileye Global and Putnam Small

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

The idea behind Mobileye Global Class and Putnam Small 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 CEOs Directory module to screen CEOs from public companies around the world.