Correlation Between Mobileye Global and Rmb Fund

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

Diversification Opportunities for Mobileye Global and Rmb Fund

-0.14

Correlation Coefficient

Mobileye Global  Rmb Fund

Good diversification

The 3 months correlation between Mobileye and Rmb is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Rmb Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund I 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 Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund I has no effect on the direction of Mobileye Global i.e., Mobileye Global and Rmb Fund go up and down completely randomly.

Pair Corralation between Mobileye Global and Rmb Fund

Given the investment horizon of 90 days Mobileye Global Class is expected to generate 2.86 times more return on investment than Rmb Fund. However, Mobileye Global is 2.86 times more volatile than Rmb Fund I. It trades about 0.31 of its potential returns per unit of risk. Rmb Fund I is currently generating about -0.31 per unit of risk. If you would invest  1,700  in Mobileye Global Class on October 7, 2024 and sell it today you would earn a total of  470.00  from holding Mobileye Global Class or generate 27.65% return on investment over 90 days.

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

Mobileye Global Class  vs.  Rmb Fund I

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 uncertain essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.

Rmb Fund I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rmb Fund I has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Rmb Fund 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 Rmb Fund

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

The idea behind Mobileye Global Class and Rmb Fund I 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.