Correlation Between Mullen Group and Cashmere Valley
Can any of the company-specific risk be diversified away by investing in both Mullen Group and Cashmere Valley 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 Mullen Group and Cashmere Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Group and Cashmere Valley Bank, you can compare the effects of market volatilities on Mullen Group and Cashmere Valley 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 Mullen Group with a short position of Cashmere Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Group and Cashmere Valley.
Diversification Opportunities for Mullen Group and Cashmere Valley
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mullen and Cashmere is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Group and Cashmere Valley Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashmere Valley Bank and Mullen 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 Mullen Group are associated (or correlated) with Cashmere Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashmere Valley Bank has no effect on the direction of Mullen Group i.e., Mullen Group and Cashmere Valley go up and down completely randomly.
Pair Corralation between Mullen Group and Cashmere Valley
Assuming the 90 days horizon Mullen Group is expected to generate 2.05 times more return on investment than Cashmere Valley. However, Mullen Group is 2.05 times more volatile than Cashmere Valley Bank. It trades about 0.05 of its potential returns per unit of risk. Cashmere Valley Bank is currently generating about 0.09 per unit of risk. If you would invest 926.00 in Mullen Group on September 2, 2024 and sell it today you would earn a total of 169.00 from holding Mullen Group or generate 18.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 69.49% |
| Values | Daily Returns |
Mullen Group vs. Cashmere Valley Bank
Performance |
| Timeline |
| Mullen Group |
| Cashmere Valley Bank |
Mullen Group and Cashmere Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Group and Cashmere Valley
The main advantage of trading using opposite Mullen Group and Cashmere Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Group position performs unexpectedly, Cashmere Valley 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 Cashmere Valley will offset losses from the drop in Cashmere Valley's long position.| Mullen Group vs. ArcBest Corp | Mullen Group vs. Old Dominion Freight | Mullen Group vs. Saia Inc | Mullen Group vs. XPO Logistics |
| Cashmere Valley vs. Santa Cruz County | Cashmere Valley vs. Montfort Capital Corp | Cashmere Valley vs. Mullen Group | Cashmere Valley vs. Cartier Resources |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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