Correlation Between AstraZeneca PLC and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Mulberry Group 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 AstraZeneca PLC and Mulberry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and Mulberry Group PLC, you can compare the effects of market volatilities on AstraZeneca PLC and Mulberry Group 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 AstraZeneca PLC with a short position of Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Mulberry Group.
Diversification Opportunities for AstraZeneca PLC and Mulberry Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AstraZeneca and Mulberry is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Mulberry Group go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Mulberry Group
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.37 times more return on investment than Mulberry Group. However, AstraZeneca PLC is 2.68 times less risky than Mulberry Group. It trades about 0.01 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.05 per unit of risk. If you would invest 1,039,923 in AstraZeneca PLC on September 12, 2024 and sell it today you would earn a total of 11,277 from holding AstraZeneca PLC or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.9% |
| Values | Daily Returns |
AstraZeneca PLC vs. Mulberry Group PLC
Performance |
| Timeline |
| AstraZeneca PLC |
| Mulberry Group PLC |
AstraZeneca PLC and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Mulberry Group
The main advantage of trading using opposite AstraZeneca PLC and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| AstraZeneca PLC vs. Mulberry Group PLC | AstraZeneca PLC vs. Ikigai Ventures | AstraZeneca PLC vs. Neometals | AstraZeneca PLC vs. Coor Service Management |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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