Correlation Between Mulberry Group and Global Net
Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Global Net 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 Mulberry Group and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Global Net Lease, you can compare the effects of market volatilities on Mulberry Group and Global Net 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 Mulberry Group with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Global Net.
Diversification Opportunities for Mulberry Group and Global Net
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mulberry and Global is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Mulberry 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 Mulberry Group PLC are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Mulberry Group i.e., Mulberry Group and Global Net go up and down completely randomly.
Pair Corralation between Mulberry Group and Global Net
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Global Net. But the stock apears to be less risky and, when comparing its historical volatility, Mulberry Group PLC is 1.49 times less risky than Global Net. The stock trades about -0.03 of its potential returns per unit of risk. The Global Net Lease is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 982.00 in Global Net Lease on September 26, 2024 and sell it today you would lose (266.00) from holding Global Net Lease or give up 27.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.98% |
| Values | Daily Returns |
Mulberry Group PLC vs. Global Net Lease
Performance |
| Timeline |
| Mulberry Group PLC |
| Global Net Lease |
Mulberry Group and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Global Net
The main advantage of trading using opposite Mulberry Group and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Mulberry Group vs. Rightmove PLC | Mulberry Group vs. Bioventix | Mulberry Group vs. VeriSign | Mulberry Group vs. Games Workshop Group |
| Global Net vs. Uniper SE | Global Net vs. Mulberry Group PLC | Global Net vs. London Security Plc | Global Net vs. Triad Group PLC |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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