Correlation Between Mulberry Group and Adidas AG
Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Adidas AG 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 Adidas AG 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 Adidas AG, you can compare the effects of market volatilities on Mulberry Group and Adidas AG 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 Adidas AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Adidas AG.
Diversification Opportunities for Mulberry Group and Adidas AG
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mulberry and Adidas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Adidas AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adidas AG 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 Adidas AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adidas AG has no effect on the direction of Mulberry Group i.e., Mulberry Group and Adidas AG go up and down completely randomly.
Pair Corralation between Mulberry Group and Adidas AG
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Adidas AG. In addition to that, Mulberry Group is 2.28 times more volatile than Adidas AG. It trades about -0.1 of its total potential returns per unit of risk. Adidas AG is currently generating about 0.0 per unit of volatility. If you would invest 22,245 in Adidas AG on September 2, 2024 and sell it today you would lose (65.00) from holding Adidas AG or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Adidas AG
Performance |
| Timeline |
| Mulberry Group PLC |
| Adidas AG |
Mulberry Group and Adidas AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Adidas AG
The main advantage of trading using opposite Mulberry Group and Adidas AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group position performs unexpectedly, Adidas AG 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 Adidas AG will offset losses from the drop in Adidas AG's long position.| Mulberry Group vs. Pfeiffer Vacuum Technology | Mulberry Group vs. Microchip Technology | Mulberry Group vs. Check Point Software | Mulberry Group vs. Bloomsbury Publishing Plc |
| Adidas AG vs. Uniper SE | Adidas AG vs. Mulberry Group PLC | Adidas AG vs. London Security Plc | Adidas AG 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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