Correlation Between Mullen Group and Santa Cruz
Can any of the company-specific risk be diversified away by investing in both Mullen Group and Santa Cruz 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 Santa Cruz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Group and Santa Cruz County, you can compare the effects of market volatilities on Mullen Group and Santa Cruz 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 Santa Cruz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Group and Santa Cruz.
Diversification Opportunities for Mullen Group and Santa Cruz
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mullen and Santa is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Group and Santa Cruz County in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santa Cruz County 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 Santa Cruz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santa Cruz County has no effect on the direction of Mullen Group i.e., Mullen Group and Santa Cruz go up and down completely randomly.
Pair Corralation between Mullen Group and Santa Cruz
Assuming the 90 days horizon Mullen Group is expected to generate 4.56 times less return on investment than Santa Cruz. In addition to that, Mullen Group is 2.59 times more volatile than Santa Cruz County. It trades about 0.01 of its total potential returns per unit of risk. Santa Cruz County is currently generating about 0.13 per unit of volatility. If you would invest 2,490 in Santa Cruz County on August 31, 2024 and sell it today you would earn a total of 1,665 from holding Santa Cruz County or generate 66.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.96% |
| Values | Daily Returns |
Mullen Group vs. Santa Cruz County
Performance |
| Timeline |
| Mullen Group |
| Santa Cruz County |
Mullen Group and Santa Cruz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Group and Santa Cruz
The main advantage of trading using opposite Mullen Group and Santa Cruz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Group position performs unexpectedly, Santa Cruz 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 Santa Cruz will offset losses from the drop in Santa Cruz's long position.| Mullen Group vs. ArcBest Corp | Mullen Group vs. Old Dominion Freight | Mullen Group vs. Saia Inc | Mullen Group vs. XPO Logistics |
| Santa Cruz vs. HUMANA INC | Santa Cruz vs. SCOR PK | Santa Cruz vs. Aquagold International | Santa Cruz vs. Thrivent High Yield |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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