Correlation Between CVR Partners and Mobix Labs

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

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

Diversification Opportunities for CVR Partners and Mobix Labs

-0.32

Correlation Coefficient

CVR Partners  Mobix Labs

Very good diversification

The 3 months correlation between CVR and Mobix is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and CVR Partners 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 CVR Partners LP 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 CVR Partners i.e., CVR Partners and Mobix Labs go up and down completely randomly.

Pair Corralation between CVR Partners and Mobix Labs

Considering the 90-day investment horizon CVR Partners LP is expected to generate 0.14 times more return on investment than Mobix Labs. However, CVR Partners LP is 7.31 times less risky than Mobix Labs. It trades about 0.04 of its potential returns per unit of risk. Mobix Labs is currently generating about -0.05 per unit of risk. If you would invest  7,343  in CVR Partners LP on December 17, 2024 and sell it today you would earn a total of  230.00  from holding CVR Partners LP or generate 3.13% return on investment over 90 days.

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

CVR Partners LP  vs.  Mobix Labs

CVR Partners LP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CVR Partners is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Mobix Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobix Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain fairly 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.

Pair Trading with CVR Partners and Mobix Labs

The main advantage of trading using opposite CVR Partners and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Partners 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 CVR Partners LP 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.