Correlation Between Aluminumof China and Mobix Labs

Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Mobix Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aluminum of and Mobix Labs, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Mobix Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Mobix Labs.

Diversification Opportunities for Aluminumof China and Mobix Labs

-0.48

Correlation Coefficient

Aluminumof China  Mobix Labs

Very good diversification

The 3 months correlation between Aluminumof and Mobix is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Mobix Labs go up and down completely randomly.

Pair Corralation between Aluminumof China and Mobix Labs

Assuming the 90 days horizon Aluminum of is expected to generate 0.25 times more return on investment than Mobix Labs. However, Aluminum of is 4.08 times less risky than Mobix Labs. It trades about 0.14 of its potential returns per unit of risk. Mobix Labs is currently generating about -0.07 per unit of risk. If you would invest  55.00  in Aluminum of on December 20, 2024 and sell it today you would earn a total of  12.00  from holding Aluminum of or generate 21.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Aluminum of  vs.  Mobix Labs

Aluminumof China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Aluminumof China reported solid returns over the last few months and may actually be approaching a breakup point.

Mobix Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobix Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aluminumof China and Mobix Labs

The main advantage of trading using opposite Aluminumof China and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.

The idea behind Aluminum of and Mobix Labs 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.