Correlation Between Westport Fuel and Mobileye Global
Can any of the company-specific risk be diversified away by investing in both Westport Fuel 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 Westport Fuel and Mobileye Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Mobileye Global Class, you can compare the effects of market volatilities on Westport Fuel 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 Westport Fuel with a short position of Mobileye Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Mobileye Global.
Diversification Opportunities for Westport Fuel and Mobileye Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westport and Mobileye is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems 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 Westport Fuel 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 Westport Fuel Systems 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 Westport Fuel i.e., Westport Fuel and Mobileye Global go up and down completely randomly.
Pair Corralation between Westport Fuel and Mobileye Global
Given the investment horizon of 90 days Westport Fuel Systems is expected to under-perform the Mobileye Global. But the stock apears to be less risky and, when comparing its historical volatility, Westport Fuel Systems is 2.82 times less risky than Mobileye Global. The stock trades about -0.01 of its potential returns per unit of risk. The Mobileye Global Class is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,247 in Mobileye Global Class on August 26, 2024 and sell it today you would earn a total of 550.00 from holding Mobileye Global Class or generate 44.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Mobileye Global Class
Performance |
| Timeline |
| Westport Fuel Systems |
| Mobileye Global Class |
Westport Fuel and Mobileye Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Mobileye Global
The main advantage of trading using opposite Westport Fuel and Mobileye Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel 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.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Mobileye Global vs. Quantumscape Corp | Mobileye Global vs. Innoviz Technologies | Mobileye Global vs. Aeva Technologies | Mobileye Global vs. Hyliion Holdings Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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