Correlation Between Emerson Radio and Mobix Labs

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

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

Diversification Opportunities for Emerson Radio and Mobix Labs

-0.64

Correlation Coefficient

Emerson Radio  Mobix Labs

Excellent diversification

The 3 months correlation between Emerson and Mobix is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Mobix Labs go up and down completely randomly.

Pair Corralation between Emerson Radio and Mobix Labs

Considering the 90-day investment horizon Emerson Radio is expected to generate 0.29 times more return on investment than Mobix Labs. However, Emerson Radio is 3.43 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 -0.02 per unit of risk. If you would invest  55.00  in Emerson Radio on October 3, 2024 and sell it today you would lose (13.00) from holding Emerson Radio or give up 23.64% of portfolio value over 90 days.

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

Emerson Radio  vs.  Mobix Labs

Emerson Radio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerson Radio 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 basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mobix Labs

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobix Labs are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Mobix Labs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Emerson Radio and Mobix Labs

The main advantage of trading using opposite Emerson Radio and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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 Emerson Radio 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.