Correlation Between Mullen and Wajax
Can any of the company-specific risk be diversified away by investing in both Mullen and Wajax 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 and Wajax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Group and Wajax, you can compare the effects of market volatilities on Mullen and Wajax 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 with a short position of Wajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen and Wajax.
Diversification Opportunities for Mullen and Wajax
Very poor diversification
The 3 months correlation between Mullen and Wajax is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Group and Wajax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wajax and Mullen 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 Wajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wajax has no effect on the direction of Mullen i.e., Mullen and Wajax go up and down completely randomly.
Pair Corralation between Mullen and Wajax
Assuming the 90 days trading horizon Mullen Group is expected to generate 0.73 times more return on investment than Wajax. However, Mullen Group is 1.37 times less risky than Wajax. It trades about 0.01 of its potential returns per unit of risk. Wajax is currently generating about 0.0 per unit of risk. If you would invest 1,305 in Mullen Group on December 25, 2024 and sell it today you would lose (13.00) from holding Mullen Group or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Group vs. Wajax
Performance |
| Timeline |
| Mullen Group |
| Wajax |
Mullen and Wajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen and Wajax
The main advantage of trading using opposite Mullen and Wajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen position performs unexpectedly, Wajax 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 Wajax will offset losses from the drop in Wajax's long position.| Mullen vs. Pason Systems | Mullen vs. Westshore Terminals Investment | Mullen vs. Superior Plus Corp | Mullen vs. Gibson Energy |
| Wajax vs. Russel Metals | Wajax vs. Bird Construction | Wajax vs. Finning International | Wajax vs. Mullen Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets |