Correlation Between Mullen Automotive and 4 Less
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and 4 Less 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 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and 4 Less Group, you can compare the effects of market volatilities on Mullen Automotive and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and 4 Less.
Diversification Opportunities for Mullen Automotive and 4 Less
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mullen and FLES is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and 4 Less go up and down completely randomly.
Pair Corralation between Mullen Automotive and 4 Less
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the 4 Less. But the stock apears to be less risky and, when comparing its historical volatility, Mullen Automotive is 1.61 times less risky than 4 Less. The stock trades about -0.13 of its potential returns per unit of risk. The 4 Less Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 220.00 in 4 Less Group on August 29, 2024 and sell it today you would lose (219.98) from holding 4 Less Group or give up 99.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mullen Automotive vs. 4 Less Group
Performance |
| Timeline |
| Mullen Automotive |
| 4 Less Group |
Mullen Automotive and 4 Less Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and 4 Less
The main advantage of trading using opposite Mullen Automotive and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| 4 Less vs. Triad Pro Innovators | 4 Less vs. ABCO Energy | 4 Less vs. Holiday Island Holdings | 4 Less vs. RCABS Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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