Correlation Between Mullen and Winpak
Can any of the company-specific risk be diversified away by investing in both Mullen and Winpak 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 Winpak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Group and Winpak, you can compare the effects of market volatilities on Mullen and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen and Winpak.
Diversification Opportunities for Mullen and Winpak
Almost no diversification
The 3 months correlation between Mullen and Winpak is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Group and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Mullen i.e., Mullen and Winpak go up and down completely randomly.
Pair Corralation between Mullen and Winpak
Assuming the 90 days trading horizon Mullen is expected to generate 1.2 times less return on investment than Winpak. But when comparing it to its historical volatility, Mullen Group is 1.19 times less risky than Winpak. It trades about 0.12 of its potential returns per unit of risk. Winpak is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,929 in Winpak on August 28, 2024 and sell it today you would earn a total of 125.00 from holding Winpak or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Group vs. Winpak
Performance |
| Timeline |
| Mullen Group |
| Winpak |
Mullen and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen and Winpak
The main advantage of trading using opposite Mullen and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Mullen vs. Pason Systems | Mullen vs. Westshore Terminals Investment | Mullen vs. Superior Plus Corp | Mullen vs. Gibson Energy |
| Winpak vs. HPQ Silicon Resources | Winpak vs. Champion Iron | Winpak vs. Osisko Metals | Winpak vs. Bip Investment Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |