Correlation Between Mobileye Global and Occidental

Can any of the company-specific risk be diversified away by investing in both Mobileye Global and Occidental 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 Occidental 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 Occidental Petroleum 44, you can compare the effects of market volatilities on Mobileye Global and Occidental 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 Occidental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and Occidental.

Diversification Opportunities for Mobileye Global and Occidental

-0.3

Correlation Coefficient

Mobileye Global  Occidental

Very good diversification

The 3 months correlation between Mobileye and Occidental is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Occidental Petroleum 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Mobileye Global i.e., Mobileye Global and Occidental go up and down completely randomly.

Pair Corralation between Mobileye Global and Occidental

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Occidental. In addition to that, Mobileye Global is 2.61 times more volatile than Occidental Petroleum 44. It trades about -0.05 of its total potential returns per unit of risk. Occidental Petroleum 44 is currently generating about 0.14 per unit of volatility. If you would invest  7,022  in Occidental Petroleum 44 on December 26, 2024 and sell it today you would earn a total of  912.00  from holding Occidental Petroleum 44 or generate 12.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

Mobileye Global Class  vs.  Occidental Petroleum 44

Mobileye Global Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobileye Global Class 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 essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Occidental Petroleum

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Occidental Petroleum 44 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Occidental sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobileye Global and Occidental

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

The idea behind Mobileye Global Class and Occidental Petroleum 44 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.