Correlation Between Mulberry Group and Trellus Health
Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Trellus Health 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 Trellus Health 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 Trellus Health plc, you can compare the effects of market volatilities on Mulberry Group and Trellus Health 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 Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Trellus Health.
Diversification Opportunities for Mulberry Group and Trellus Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mulberry and Trellus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health plc 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 Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of Mulberry Group i.e., Mulberry Group and Trellus Health go up and down completely randomly.
Pair Corralation between Mulberry Group and Trellus Health
Assuming the 90 days trading horizon Mulberry Group PLC is expected to generate 1.37 times more return on investment than Trellus Health. However, Mulberry Group is 1.37 times more volatile than Trellus Health plc. It trades about -0.07 of its potential returns per unit of risk. Trellus Health plc is currently generating about -0.11 per unit of risk. If you would invest 10,750 in Mulberry Group PLC on September 12, 2024 and sell it today you would lose (750.00) from holding Mulberry Group PLC or give up 6.98% 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. Trellus Health plc
Performance |
| Timeline |
| Mulberry Group PLC |
| Trellus Health plc |
Mulberry Group and Trellus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Trellus Health
The main advantage of trading using opposite Mulberry Group and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.| Mulberry Group vs. Wizz Air Holdings | Mulberry Group vs. AMG Advanced Metallurgical | Mulberry Group vs. Sovereign Metals | Mulberry Group vs. Central Asia Metals |
| Trellus Health vs. Mulberry Group PLC | Trellus Health vs. Ikigai Ventures | Trellus Health vs. Neometals | Trellus Health vs. Coor Service Management |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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