Correlation Between Mullen Automotive and China Xuefeng
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and China Xuefeng 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 China Xuefeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and China Xuefeng Environmental, you can compare the effects of market volatilities on Mullen Automotive and China Xuefeng 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 China Xuefeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and China Xuefeng.
Diversification Opportunities for Mullen Automotive and China Xuefeng
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mullen and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and China Xuefeng Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Xuefeng Enviro 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 China Xuefeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Xuefeng Enviro has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and China Xuefeng go up and down completely randomly.
Pair Corralation between Mullen Automotive and China Xuefeng
Given the investment horizon of 90 days Mullen Automotive is expected to generate 0.75 times more return on investment than China Xuefeng. However, Mullen Automotive is 1.33 times less risky than China Xuefeng. It trades about 0.08 of its potential returns per unit of risk. China Xuefeng Environmental is currently generating about 0.06 per unit of risk. If you would invest 253.00 in Mullen Automotive on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Mullen Automotive or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. China Xuefeng Environmental
Performance |
| Timeline |
| Mullen Automotive |
| China Xuefeng Enviro |
Mullen Automotive and China Xuefeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and China Xuefeng
The main advantage of trading using opposite Mullen Automotive and China Xuefeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, China Xuefeng 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 China Xuefeng will offset losses from the drop in China Xuefeng's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Renault SA | China Xuefeng vs. Toyota Motor Corp | China Xuefeng vs. Porsche Automobile Holding |
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 CEOs Directory module to screen CEOs from public companies around the world.
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