Correlation Between NexteGO NV and Mullen Automotive
Can any of the company-specific risk be diversified away by investing in both NexteGO NV and Mullen Automotive 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 NexteGO NV and Mullen Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexteGO NV Ordinary and Mullen Automotive, you can compare the effects of market volatilities on NexteGO NV and Mullen Automotive 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 NexteGO NV with a short position of Mullen Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexteGO NV and Mullen Automotive.
Diversification Opportunities for NexteGO NV and Mullen Automotive
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexteGO and Mullen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NexteGO NV Ordinary and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive and NexteGO NV 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 NexteGO NV Ordinary are associated (or correlated) with Mullen Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Automotive has no effect on the direction of NexteGO NV i.e., NexteGO NV and Mullen Automotive go up and down completely randomly.
Pair Corralation between NexteGO NV and Mullen Automotive
Given the investment horizon of 90 days NexteGO NV Ordinary is expected to generate 2.6 times more return on investment than Mullen Automotive. However, NexteGO NV is 2.6 times more volatile than Mullen Automotive. It trades about -0.02 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.13 per unit of risk. If you would invest 975.00 in NexteGO NV Ordinary on August 26, 2024 and sell it today you would lose (974.99) from holding NexteGO NV Ordinary or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.54% |
| Values | Daily Returns |
NexteGO NV Ordinary vs. Mullen Automotive
Performance |
| Timeline |
| NexteGO NV Ordinary |
| Mullen Automotive |
NexteGO NV and Mullen Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexteGO NV and Mullen Automotive
The main advantage of trading using opposite NexteGO NV and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexteGO NV position performs unexpectedly, Mullen Automotive 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 Mullen Automotive will offset losses from the drop in Mullen Automotive's long position.| NexteGO NV vs. Nio Class A | NexteGO NV vs. Rivian Automotive | NexteGO NV vs. Lucid Group | NexteGO NV vs. Tesla Inc |
| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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