Correlation Between Mullen Group and Westbury Bancorp
Can any of the company-specific risk be diversified away by investing in both Mullen Group and Westbury Bancorp 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 Westbury Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Group and Westbury Bancorp, you can compare the effects of market volatilities on Mullen Group and Westbury Bancorp 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 Westbury Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Group and Westbury Bancorp.
Diversification Opportunities for Mullen Group and Westbury Bancorp
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mullen and Westbury is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Group and Westbury Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westbury Bancorp 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 Westbury Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westbury Bancorp has no effect on the direction of Mullen Group i.e., Mullen Group and Westbury Bancorp go up and down completely randomly.
Pair Corralation between Mullen Group and Westbury Bancorp
Assuming the 90 days horizon Mullen Group is expected to generate 7.67 times more return on investment than Westbury Bancorp. However, Mullen Group is 7.67 times more volatile than Westbury Bancorp. It trades about 0.02 of its potential returns per unit of risk. Westbury Bancorp is currently generating about 0.12 per unit of risk. If you would invest 1,020 in Mullen Group on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Mullen Group or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.36% |
| Values | Daily Returns |
Mullen Group vs. Westbury Bancorp
Performance |
| Timeline |
| Mullen Group |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mullen Group and Westbury Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Group and Westbury Bancorp
The main advantage of trading using opposite Mullen Group and Westbury Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Group position performs unexpectedly, Westbury Bancorp 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 Westbury Bancorp will offset losses from the drop in Westbury Bancorp's long position.| Mullen Group vs. ArcBest Corp | Mullen Group vs. Old Dominion Freight | Mullen Group vs. Saia Inc | Mullen Group vs. XPO Logistics |
| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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