Correlation Between Mullen Automotive and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Sumitomo Electric 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 Sumitomo Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Sumitomo Electric Industries, you can compare the effects of market volatilities on Mullen Automotive and Sumitomo Electric 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 Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Sumitomo Electric.
Diversification Opportunities for Mullen Automotive and Sumitomo Electric
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mullen and Sumitomo is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric 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 Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Mullen Automotive and Sumitomo Electric
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Sumitomo Electric. In addition to that, Mullen Automotive is 20.61 times more volatile than Sumitomo Electric Industries. It trades about -0.28 of its total potential returns per unit of risk. Sumitomo Electric Industries is currently generating about 0.13 per unit of volatility. If you would invest 1,505 in Sumitomo Electric Industries on August 29, 2024 and sell it today you would earn a total of 152.00 from holding Sumitomo Electric Industries or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. Sumitomo Electric Industries
Performance |
| Timeline |
| Mullen Automotive |
| Sumitomo Electric |
Mullen Automotive and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Sumitomo Electric
The main advantage of trading using opposite Mullen Automotive and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Sumitomo Electric 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 Sumitomo Electric will offset losses from the drop in Sumitomo Electric's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| Sumitomo Electric vs. Analog Devices | Sumitomo Electric vs. Microchip Technology | Sumitomo Electric vs. IPG Photonics | Sumitomo Electric vs. Marti Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |