Correlation Between Mullen Automotive and Lordstown Motors
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Lordstown Motors 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 Lordstown Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Lordstown Motors Corp, you can compare the effects of market volatilities on Mullen Automotive and Lordstown Motors 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 Lordstown Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Lordstown Motors.
Diversification Opportunities for Mullen Automotive and Lordstown Motors
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mullen and Lordstown is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Lordstown Motors Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lordstown Motors Corp 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 Lordstown Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lordstown Motors Corp has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Lordstown Motors go up and down completely randomly.
Pair Corralation between Mullen Automotive and Lordstown Motors
If you would invest 295.00 in Lordstown Motors Corp on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Lordstown Motors Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Mullen Automotive vs. Lordstown Motors Corp
Performance |
| Timeline |
| Mullen Automotive |
| Lordstown Motors Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mullen Automotive and Lordstown Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Lordstown Motors
The main advantage of trading using opposite Mullen Automotive and Lordstown Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Lordstown Motors 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 Lordstown Motors will offset losses from the drop in Lordstown Motors' long position.The idea behind Mullen Automotive and Lordstown Motors Corp 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.| Lordstown Motors vs. Workhorse Group | Lordstown Motors vs. Canoo Inc | Lordstown Motors vs. Hyliion Holdings Corp | Lordstown Motors vs. Blink Charging Co |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |