Correlation Between Finning International and Mullen
Can any of the company-specific risk be diversified away by investing in both Finning International and Mullen 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 Finning International and Mullen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finning International and Mullen Group, you can compare the effects of market volatilities on Finning International and Mullen 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 Finning International with a short position of Mullen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finning International and Mullen.
Diversification Opportunities for Finning International and Mullen
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finning and Mullen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Finning International and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and Finning 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 Finning International are associated (or correlated) with Mullen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Finning International i.e., Finning International and Mullen go up and down completely randomly.
Pair Corralation between Finning International and Mullen
Assuming the 90 days trading horizon Finning International is expected to under-perform the Mullen. In addition to that, Finning International is 2.47 times more volatile than Mullen Group. It trades about -0.19 of its total potential returns per unit of risk. Mullen Group is currently generating about 0.01 per unit of volatility. If you would invest 1,544 in Mullen Group on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Mullen Group or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Finning International vs. Mullen Group
Performance |
| Timeline |
| Finning International |
| Mullen Group |
Finning International and Mullen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finning International and Mullen
The main advantage of trading using opposite Finning International and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finning International position performs unexpectedly, Mullen 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 will offset losses from the drop in Mullen's long position.| Finning International vs. Toromont Industries | Finning International vs. Ritchie Bros Auctioneers | Finning International vs. Stantec | Finning International vs. Transcontinental |
| Mullen vs. Pason Systems | Mullen vs. Westshore Terminals Investment | Mullen vs. Superior Plus Corp | Mullen vs. Gibson 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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