Correlation Between Hesai Group and Mobileye Global

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

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

Diversification Opportunities for Hesai Group and Mobileye Global

0.36

Correlation Coefficient

Hesai Group  Mobileye Global

Weak diversification

The 3 months correlation between Hesai and Mobileye is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hesai Group American 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 Hesai Group 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 Hesai Group American 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 Hesai Group i.e., Hesai Group and Mobileye Global go up and down completely randomly.

Pair Corralation between Hesai Group and Mobileye Global

Given the investment horizon of 90 days Hesai Group American is expected to generate 1.82 times more return on investment than Mobileye Global. However, Hesai Group is 1.82 times more volatile than Mobileye Global Class. It trades about 0.26 of its potential returns per unit of risk. Mobileye Global Class is currently generating about 0.33 per unit of risk. If you would invest  455.00  in Hesai Group American on August 31, 2024 and sell it today you would earn a total of  280.00  from holding Hesai Group American or generate 61.54% return on investment over 90 days.

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

Hesai Group American  vs.  Mobileye Global Class

Hesai Group American

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hesai Group American are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Hesai Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Hesai Group and Mobileye Global

The main advantage of trading using opposite Hesai Group and Mobileye Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hesai Group 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 Hesai Group American 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.