Correlation Between Mobileye Global and PHENIXFIN

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

Diversification Opportunities for Mobileye Global and PHENIXFIN

0.52

Correlation Coefficient

Mobileye Global  PHENIXFIN

Very weak diversification

The 3 months correlation between Mobileye and PHENIXFIN is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and PHENIXFIN P DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHENIXFIN P DL 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 PHENIXFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHENIXFIN P DL has no effect on the direction of Mobileye Global i.e., Mobileye Global and PHENIXFIN go up and down completely randomly.

Pair Corralation between Mobileye Global and PHENIXFIN

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 3.43 times more return on investment than PHENIXFIN. However, Mobileye Global is 3.43 times more volatile than PHENIXFIN P DL. It trades about 0.1 of its potential returns per unit of risk. PHENIXFIN P DL is currently generating about 0.07 per unit of risk. If you would invest  1,257  in Mobileye Global Class on October 23, 2024 and sell it today you would earn a total of  345.00  from holding Mobileye Global Class or generate 27.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Mobileye Global Class  vs.  PHENIXFIN P DL

Mobileye Global Class

Risk-Adjusted Performance

8 of 100

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.

PHENIXFIN P DL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mobileye Global and PHENIXFIN

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

The idea behind Mobileye Global Class and PHENIXFIN P DL 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.