Correlation Between Mulberry Group and Investment
Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Investment 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 Investment 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 The Investment, you can compare the effects of market volatilities on Mulberry Group and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Investment.
Diversification Opportunities for Mulberry Group and Investment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mulberry and Investment is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Mulberry Group i.e., Mulberry Group and Investment go up and down completely randomly.
Pair Corralation between Mulberry Group and Investment
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Investment. In addition to that, Mulberry Group is 3.41 times more volatile than The Investment. It trades about -0.03 of its total potential returns per unit of risk. The Investment is currently generating about 0.08 per unit of volatility. If you would invest 25,500 in The Investment on August 26, 2024 and sell it today you would earn a total of 12,100 from holding The Investment or generate 47.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.8% |
| Values | Daily Returns |
Mulberry Group PLC vs. The Investment
Performance |
| Timeline |
| Mulberry Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Investment |
Mulberry Group and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Investment
The main advantage of trading using opposite Mulberry Group and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Mulberry Group vs. GoldMining | Mulberry Group vs. Lundin Mining Corp | Mulberry Group vs. Wheaton Precious Metals | Mulberry Group vs. Blackrock World Mining |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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