Correlation Between Brunswick and Mobix Labs

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

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

Diversification Opportunities for Brunswick and Mobix Labs

0.41

Correlation Coefficient

Brunswick  Mobix Labs

Very weak diversification

The 3 months correlation between Brunswick and Mobix is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Brunswick 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 Brunswick 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 Brunswick i.e., Brunswick and Mobix Labs go up and down completely randomly.

Pair Corralation between Brunswick and Mobix Labs

Allowing for the 90-day total investment horizon Brunswick is expected to generate 0.18 times more return on investment than Mobix Labs. However, Brunswick is 5.61 times less risky than Mobix Labs. It trades about -0.12 of its potential returns per unit of risk. Mobix Labs is currently generating about -0.07 per unit of risk. If you would invest  6,629  in Brunswick on December 20, 2024 and sell it today you would lose (993.00) from holding Brunswick or give up 14.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Brunswick  vs.  Mobix Labs

Brunswick

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Brunswick and Mobix Labs

The main advantage of trading using opposite Brunswick and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick 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 Brunswick 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.