Correlation Between Movella Holdings and Aware

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

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

Diversification Opportunities for Movella Holdings and Aware

-0.76

Correlation Coefficient

Movella Holdings  Aware

Pay attention - limited upside

The 3 months correlation between Movella and Aware is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Movella Holdings and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Movella Holdings 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 Movella Holdings are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Movella Holdings i.e., Movella Holdings and Aware go up and down completely randomly.

Pair Corralation between Movella Holdings and Aware

Given the investment horizon of 90 days Movella Holdings is expected to under-perform the Aware. In addition to that, Movella Holdings is 2.18 times more volatile than Aware Inc. It trades about -0.09 of its total potential returns per unit of risk. Aware Inc is currently generating about 0.01 per unit of volatility. If you would invest  180.00  in Aware Inc on September 28, 2024 and sell it today you would lose (27.00) from holding Aware Inc or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	27.42%
Values	Daily Returns

Movella Holdings  vs.  Aware Inc

Movella Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movella Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Movella Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Aware Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Movella Holdings and Aware

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

The idea behind Movella Holdings and Aware 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 Stocks Directory module to find actively traded stocks across global markets.