Correlation Between Globalfoundries and Mobix Labs

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

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

Diversification Opportunities for Globalfoundries and Mobix Labs

-0.38

Correlation Coefficient

Globalfoundries  Mobix Labs

Very good diversification

The 3 months correlation between Globalfoundries and Mobix is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Globalfoundries 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 Globalfoundries 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 Globalfoundries i.e., Globalfoundries and Mobix Labs go up and down completely randomly.

Pair Corralation between Globalfoundries and Mobix Labs

Considering the 90-day investment horizon Globalfoundries is expected to generate 51.6 times less return on investment than Mobix Labs. But when comparing it to its historical volatility, Globalfoundries is 8.67 times less risky than Mobix Labs. It trades about 0.02 of its potential returns per unit of risk. Mobix Labs is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Mobix Labs on October 3, 2024 and sell it today you would lose (3.00) from holding Mobix Labs or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.62%
Values	Daily Returns

Globalfoundries  vs.  Mobix Labs

Globalfoundries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Globalfoundries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mobix Labs

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mobix Labs are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Mobix Labs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globalfoundries and Mobix Labs

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

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.