Correlation Between Mullen Automotive and First National
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and First National 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 First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and First National of, you can compare the effects of market volatilities on Mullen Automotive and First National 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 First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and First National.
Diversification Opportunities for Mullen Automotive and First National
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mullen and First is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and First National of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and First National go up and down completely randomly.
Pair Corralation between Mullen Automotive and First National
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the First National. In addition to that, Mullen Automotive is 5.99 times more volatile than First National of. It trades about -0.13 of its total potential returns per unit of risk. First National of is currently generating about 0.0 per unit of volatility. If you would invest 1,314,991 in First National of on August 24, 2024 and sell it today you would lose (94,991) from holding First National of or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.65% |
| Values | Daily Returns |
Mullen Automotive vs. First National of
Performance |
| Timeline |
| Mullen Automotive |
| First National |
Mullen Automotive and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and First National
The main advantage of trading using opposite Mullen Automotive and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, First National 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 First National will offset losses from the drop in First National'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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