Correlation Between Aeva Technologies and Mobileye Global

Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Mobileye Global 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 Aeva Technologies and Mobileye Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeva Technologies and Mobileye Global Class, you can compare the effects of market volatilities on Aeva Technologies and Mobileye Global 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 Aeva Technologies with a short position of Mobileye Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Mobileye Global.

Diversification Opportunities for Aeva Technologies and Mobileye Global

-0.49

Correlation Coefficient

Aeva Technologies  Mobileye Global

Very good diversification

The 3 months correlation between Aeva and Mobileye is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Mobileye Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileye Global Class and Aeva Technologies 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 Aeva Technologies are associated (or correlated) with Mobileye Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileye Global Class has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Mobileye Global go up and down completely randomly.

Pair Corralation between Aeva Technologies and Mobileye Global

Given the investment horizon of 90 days Aeva Technologies is expected to generate 1.66 times more return on investment than Mobileye Global. However, Aeva Technologies is 1.66 times more volatile than Mobileye Global Class. It trades about 0.1 of its potential returns per unit of risk. Mobileye Global Class is currently generating about -0.13 per unit of risk. If you would invest  344.00  in Aeva Technologies on February 14, 2024 and sell it today you would earn a total of  28.50  from holding Aeva Technologies or generate 8.28% return on investment over 90 days.

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

Aeva Technologies  vs.  Mobileye Global Class

Aeva Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Mobileye Global Class

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Mobileye Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Aeva Technologies and Mobileye Global

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

The idea behind Aeva Technologies and Mobileye Global Class 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.