Correlation Between Mobix Labs and CEVA

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

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

Diversification Opportunities for Mobix Labs and CEVA

-0.36

Correlation Coefficient

Mobix Labs  CEVA

Very good diversification

The 3 months correlation between Mobix and CEVA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mobix Labs and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and Mobix Labs 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 Mobix Labs are associated (or correlated) with CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Mobix Labs i.e., Mobix Labs and CEVA go up and down completely randomly.

Pair Corralation between Mobix Labs and CEVA

Assuming the 90 days horizon Mobix Labs is expected to generate 8.8 times more return on investment than CEVA. However, Mobix Labs is 8.8 times more volatile than CEVA Inc. It trades about 0.05 of its potential returns per unit of risk. CEVA Inc is currently generating about 0.17 per unit of risk. If you would invest  12.00  in Mobix Labs on October 24, 2024 and sell it today you would lose (1.00) from holding Mobix Labs or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Mobix Labs  vs.  CEVA Inc

Mobix Labs

Risk-Adjusted Performance

6 of 100

Modest

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

CEVA Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mobix Labs and CEVA

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

The idea behind Mobix Labs and CEVA Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.