Correlation Between Mobileye Global and DoubleVerify Holdings

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

By analyzing existing cross correlation between Mobileye Global and DoubleVerify Holdings, you can compare the effects of market volatilities on Mobileye Global and DoubleVerify Holdings 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 DoubleVerify Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and DoubleVerify Holdings.

Diversification Opportunities for Mobileye Global and DoubleVerify Holdings

0.43

Correlation Coefficient

Mobileye Global DoubleVerify Holdings

Very weak diversification

The 3 months correlation between Mobileye and DoubleVerify is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Inc and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings 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 are associated (or correlated) with DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Mobileye Global i.e., Mobileye Global and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Mobileye Global and DoubleVerify Holdings

Given the investment horizon of 90 days Mobileye Global is expected to generate 1.17 times less return on investment than DoubleVerify Holdings. In addition to that, Mobileye Global is 1.58 times more volatile than DoubleVerify Holdings. It trades about 0.07 of its total potential returns per unit of risk. DoubleVerify Holdings is currently generating about 0.13 per unit of volatility. If you would invest  2,500  in DoubleVerify Holdings on March 10, 2023 and sell it today you would earn a total of  1,039  from holding DoubleVerify Holdings or generate 41.56% return on investment over 90 days.

Mobileye Global Inc  vs.  DoubleVerify Holdings

Mobileye Global

Mobileye Performance

3 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Mobileye Global may actually be approaching a critical reversion point that can send shares even higher in July 2023.

DoubleVerify Holdings

DoubleVerify Performance

19 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleVerify Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, DoubleVerify Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobileye Global and DoubleVerify Holdings

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

The idea behind Mobileye Global and DoubleVerify Holdings 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.