Correlation Between Mullen Automotive and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and MBT Bancshares 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 MBT Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and MBT Bancshares, you can compare the effects of market volatilities on Mullen Automotive and MBT Bancshares 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 MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and MBT Bancshares.
Diversification Opportunities for Mullen Automotive and MBT Bancshares
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mullen and MBT is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares 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 MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and MBT Bancshares go up and down completely randomly.
Pair Corralation between Mullen Automotive and MBT Bancshares
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the MBT Bancshares. In addition to that, Mullen Automotive is 3.57 times more volatile than MBT Bancshares. It trades about -0.13 of its total potential returns per unit of risk. MBT Bancshares is currently generating about 0.01 per unit of volatility. If you would invest 2,250 in MBT Bancshares on August 29, 2024 and sell it today you would lose (295.00) from holding MBT Bancshares or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.52% |
| Values | Daily Returns |
Mullen Automotive vs. MBT Bancshares
Performance |
| Timeline |
| Mullen Automotive |
| MBT Bancshares |
Mullen Automotive and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and MBT Bancshares
The main advantage of trading using opposite Mullen Automotive and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, MBT Bancshares 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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