Correlation Between Mohawk Group and Turtle Beach

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

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

Diversification Opportunities for Mohawk Group and Turtle Beach

0.0

Correlation Coefficient

Mohawk Group  Turtle Beach

Pay attention - limited upside

The 3 months correlation between Mohawk and Turtle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Group Holdings and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp and Mohawk Group 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 Mohawk Group Holdings are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of Mohawk Group i.e., Mohawk Group and Turtle Beach go up and down completely randomly.

Pair Corralation between Mohawk Group and Turtle Beach

If you would invest  852.00  in Turtle Beach Corp on January 16, 2024 and sell it today you would earn a total of  730.00  from holding Turtle Beach Corp or generate 85.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mohawk Group Holdings  vs.  Turtle Beach Corp

Mohawk Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turtle Beach Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mohawk Group and Turtle Beach

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

The idea behind Mohawk Group Holdings and Turtle Beach Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.