Correlation Between Mullen Automotive and Freegold Ventures
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Freegold Ventures 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 Freegold Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Freegold Ventures Limited, you can compare the effects of market volatilities on Mullen Automotive and Freegold Ventures 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 Freegold Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Freegold Ventures.
Diversification Opportunities for Mullen Automotive and Freegold Ventures
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mullen and Freegold is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Freegold Ventures Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freegold Ventures 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 Freegold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freegold Ventures has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Freegold Ventures go up and down completely randomly.
Pair Corralation between Mullen Automotive and Freegold Ventures
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Freegold Ventures. In addition to that, Mullen Automotive is 2.76 times more volatile than Freegold Ventures Limited. It trades about -0.61 of its total potential returns per unit of risk. Freegold Ventures Limited is currently generating about 0.17 per unit of volatility. If you would invest 60.00 in Freegold Ventures Limited on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Freegold Ventures Limited or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mullen Automotive vs. Freegold Ventures Limited
Performance |
| Timeline |
| Mullen Automotive |
| Freegold Ventures |
Mullen Automotive and Freegold Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Freegold Ventures
The main advantage of trading using opposite Mullen Automotive and Freegold Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Freegold Ventures 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 Freegold Ventures will offset losses from the drop in Freegold Ventures' long position.The idea behind Mullen Automotive and Freegold Ventures Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Freegold Ventures vs. Mundoro Capital | Freegold Ventures vs. Norra Metals Corp | Freegold Ventures vs. E79 Resources Corp | Freegold Ventures vs. Voltage Metals Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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