Correlation Between Wisekey International and Mobix Labs

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

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

Diversification Opportunities for Wisekey International and Mobix Labs

0.47

Correlation Coefficient

Wisekey International  Mobix Labs

Very weak diversification

The 3 months correlation between Wisekey and Mobix is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Mobix Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobix Labs and Wisekey International 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 Wisekey International Holding 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 Wisekey International i.e., Wisekey International and Mobix Labs go up and down completely randomly.

Pair Corralation between Wisekey International and Mobix Labs

Given the investment horizon of 90 days Wisekey International Holding is expected to generate 0.64 times more return on investment than Mobix Labs. However, Wisekey International Holding is 1.57 times less risky than Mobix Labs. It trades about 0.13 of its potential returns per unit of risk. Mobix Labs is currently generating about 0.07 per unit of risk. If you would invest  214.00  in Wisekey International Holding on September 13, 2024 and sell it today you would earn a total of  114.00  from holding Wisekey International Holding or generate 53.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Wisekey International Holding  vs.  Mobix Labs

Wisekey International

Risk-Adjusted Performance

10 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wisekey International Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Wisekey International showed solid returns over the last few months and may actually be approaching a breakup point.

Mobix Labs

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mobix Labs are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, Mobix Labs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wisekey International and Mobix Labs

The main advantage of trading using opposite Wisekey International and Mobix Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International 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 Wisekey International Holding 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.