Correlation Between GreenPower and Mullen
Can any of the company-specific risk be diversified away by investing in both GreenPower 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 GreenPower and Mullen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Mullen Group, you can compare the effects of market volatilities on GreenPower 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 GreenPower with a short position of Mullen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Mullen.
Diversification Opportunities for GreenPower and Mullen
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GreenPower and Mullen is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and GreenPower 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 GreenPower Motor 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 GreenPower i.e., GreenPower and Mullen go up and down completely randomly.
Pair Corralation between GreenPower and Mullen
Assuming the 90 days horizon GreenPower Motor is expected to under-perform the Mullen. In addition to that, GreenPower is 3.85 times more volatile than Mullen Group. It trades about -0.03 of its total potential returns per unit of risk. Mullen Group is currently generating about 0.03 per unit of volatility. If you would invest 1,402 in Mullen Group on September 12, 2024 and sell it today you would earn a total of 144.00 from holding Mullen Group or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Mullen Group
Performance |
| Timeline |
| GreenPower Motor |
| Mullen Group |
GreenPower and Mullen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Mullen
The main advantage of trading using opposite GreenPower and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower 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.| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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