Correlation Between Small Cap and Mobix Labs
Can any of the company-specific risk be diversified away by investing in both Small Cap and Mobix Labs 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 Small Cap and Mobix Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Premium and Mobix Labs, you can compare the effects of market volatilities on Small Cap and Mobix Labs 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 Small Cap with a short position of Mobix Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Mobix Labs.
Diversification Opportunities for Small Cap and Mobix Labs
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Small and Mobix is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Small Cap 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 Small Cap Premium are associated (or correlated) with Mobix Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobix Labs has no effect on the direction of Small Cap i.e., Small Cap and Mobix Labs go up and down completely randomly.
Pair Corralation between Small Cap and Mobix Labs
Considering the 90-day investment horizon Small Cap Premium is expected to under-perform the Mobix Labs. But the stock apears to be less risky and, when comparing its historical volatility, Small Cap Premium is 60.49 times less risky than Mobix Labs. The stock trades about -0.01 of its potential returns per unit of risk. The Mobix Labs is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Mobix Labs on September 12, 2024 and sell it today you would earn a total of 3.81 from holding Mobix Labs or generate 47.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
Small Cap Premium vs. Mobix Labs
Performance |
| Timeline |
| Small Cap Premium |
| Mobix Labs |
Small Cap and Mobix Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Mobix Labs
The main advantage of trading using opposite Small Cap and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Mobix Labs 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 Mobix Labs will offset losses from the drop in Mobix Labs' long position.| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. Voya Global Advantage | Small Cap vs. Ready Capital |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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