Correlation Between Mobileye Global and Aeye

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

Diversification Opportunities for Mobileye Global and Aeye

-0.36

Correlation Coefficient

Mobileye Global  Aeye

Very good diversification

The 3 months correlation between Mobileye and Aeye is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc 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 Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Mobileye Global i.e., Mobileye Global and Aeye go up and down completely randomly.

Pair Corralation between Mobileye Global and Aeye

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Aeye. But the stock apears to be less risky and, when comparing its historical volatility, Mobileye Global Class is 6.53 times less risky than Aeye. The stock trades about -0.01 of its potential returns per unit of risk. The Aeye Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Aeye Inc on May 7, 2025 and sell it today you would earn a total of  186.00  from holding Aeye Inc or generate 286.15% 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.  Aeye Inc

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 fairly strong essential indicators, Mobileye Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Aeye Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeye Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Aeye reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobileye Global and Aeye

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

The idea behind Mobileye Global Class and Aeye Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.