Correlation Between Mobileye Global and Quantum Foods

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

Diversification Opportunities for Mobileye Global and Quantum Foods

-0.67

Correlation Coefficient

Mobileye Global  Quantum Foods

Excellent diversification

The 3 months correlation between Mobileye and Quantum is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Quantum Foods Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Foods Holdings 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 Quantum Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Foods Holdings has no effect on the direction of Mobileye Global i.e., Mobileye Global and Quantum Foods go up and down completely randomly.

Pair Corralation between Mobileye Global and Quantum Foods

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 0.7 times more return on investment than Quantum Foods. However, Mobileye Global Class is 1.43 times less risky than Quantum Foods. It trades about 0.1 of its potential returns per unit of risk. Quantum Foods Holdings is currently generating about -0.1 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mobileye Global Class  vs.  Quantum Foods Holdings

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.

Quantum Foods Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum Foods Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Mobileye Global and Quantum Foods

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

The idea behind Mobileye Global Class and Quantum Foods Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.