Correlation Between Mobilicom Limited and Wialan Technologies

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

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

Diversification Opportunities for Mobilicom Limited and Wialan Technologies

0.38

Correlation Coefficient

Mobilicom Limited  Wialan Technologies

Weak diversification

The 3 months correlation between Mobilicom and Wialan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mobilicom Limited American and Wialan Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wialan Technologies and Mobilicom Limited 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 Mobilicom Limited American are associated (or correlated) with Wialan Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wialan Technologies has no effect on the direction of Mobilicom Limited i.e., Mobilicom Limited and Wialan Technologies go up and down completely randomly.

Pair Corralation between Mobilicom Limited and Wialan Technologies

Considering the 90-day investment horizon Mobilicom Limited American is expected to under-perform the Wialan Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Mobilicom Limited American is 1.11 times less risky than Wialan Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The Wialan Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Wialan Technologies on December 29, 2024 and sell it today you would earn a total of  0.02  from holding Wialan Technologies or generate 25.0% return on investment over 90 days.

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

Mobilicom Limited American  vs.  Wialan Technologies

Mobilicom Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobilicom Limited American has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Wialan Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wialan Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Wialan Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobilicom Limited and Wialan Technologies

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

The idea behind Mobilicom Limited American and Wialan Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.