Correlation Between PWFL Old and Mobilicom Limited

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

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

Diversification Opportunities for PWFL Old and Mobilicom Limited

-0.28

Correlation Coefficient

PWFL Old  Mobilicom Limited

Very good diversification

The 3 months correlation between PWFL and Mobilicom is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PWFL Old and Mobilicom Limited Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobilicom Limited and PWFL Old 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 PWFL Old are associated (or correlated) with Mobilicom Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobilicom Limited has no effect on the direction of PWFL Old i.e., PWFL Old and Mobilicom Limited go up and down completely randomly.

Pair Corralation between PWFL Old and Mobilicom Limited

Given the investment horizon of 90 days PWFL Old is expected to generate 64.05 times less return on investment than Mobilicom Limited. But when comparing it to its historical volatility, PWFL Old is 29.58 times less risky than Mobilicom Limited. It trades about 0.06 of its potential returns per unit of risk. Mobilicom Limited Warrants is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Mobilicom Limited Warrants on October 11, 2024 and sell it today you would earn a total of  61.00  from holding Mobilicom Limited Warrants or generate 435.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.75%
Values	Daily Returns

PWFL Old  vs.  Mobilicom Limited Warrants

PWFL Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PWFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, PWFL Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Mobilicom Limited

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mobilicom Limited Warrants are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Mobilicom Limited showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PWFL Old and Mobilicom Limited

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

The idea behind PWFL Old and Mobilicom Limited Warrants 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.