Correlation Between Mullen Automotive and Canoo
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Canoo 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 Canoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Canoo Inc, you can compare the effects of market volatilities on Mullen Automotive and Canoo 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 Canoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Canoo.
Diversification Opportunities for Mullen Automotive and Canoo
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mullen and Canoo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Canoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo 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 Canoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Inc has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Canoo go up and down completely randomly.
Pair Corralation between Mullen Automotive and Canoo
Given the investment horizon of 90 days Mullen Automotive is expected to generate 1.32 times more return on investment than Canoo. However, Mullen Automotive is 1.32 times more volatile than Canoo Inc. It trades about 0.1 of its potential returns per unit of risk. Canoo Inc is currently generating about -0.18 per unit of risk. If you would invest 253.00 in Mullen Automotive on August 27, 2024 and sell it today you would earn a total of 34.00 from holding Mullen Automotive or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. Canoo Inc
Performance |
| Timeline |
| Mullen Automotive |
| Canoo Inc |
Mullen Automotive and Canoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Canoo
The main advantage of trading using opposite Mullen Automotive and Canoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Canoo 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 Canoo will offset losses from the drop in Canoo's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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