Correlation Between Mullen Automotive and Bantek
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Bantek 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 Automotive and Bantek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Bantek Inc, you can compare the effects of market volatilities on Mullen Automotive and Bantek 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 Automotive with a short position of Bantek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Bantek.
Diversification Opportunities for Mullen Automotive and Bantek
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mullen and Bantek is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Bantek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bantek Inc and Mullen Automotive 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 Automotive are associated (or correlated) with Bantek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bantek Inc has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Bantek go up and down completely randomly.
Pair Corralation between Mullen Automotive and Bantek
Given the investment horizon of 90 days Mullen Automotive is expected to generate 1.72 times less return on investment than Bantek. But when comparing it to its historical volatility, Mullen Automotive is 1.1 times less risky than Bantek. It trades about 0.15 of its potential returns per unit of risk. Bantek Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.12 in Bantek Inc on September 2, 2024 and sell it today you would earn a total of 0.11 from holding Bantek Inc or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. Bantek Inc
Performance |
| Timeline |
| Mullen Automotive |
| Bantek Inc |
Mullen Automotive and Bantek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Bantek
The main advantage of trading using opposite Mullen Automotive and Bantek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Bantek 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 Bantek will offset losses from the drop in Bantek's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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