Correlation Between Mullen Automotive and Weir
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Weir 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 Weir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and The Weir Group, you can compare the effects of market volatilities on Mullen Automotive and Weir 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 Weir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Weir.
Diversification Opportunities for Mullen Automotive and Weir
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mullen and Weir is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and The Weir Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir 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 Weir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Weir go up and down completely randomly.
Pair Corralation between Mullen Automotive and Weir
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Weir. In addition to that, Mullen Automotive is 6.98 times more volatile than The Weir Group. It trades about -0.2 of its total potential returns per unit of risk. The Weir Group is currently generating about 0.06 per unit of volatility. If you would invest 2,542 in The Weir Group on September 12, 2024 and sell it today you would earn a total of 163.00 from holding The Weir Group or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. The Weir Group
Performance |
| Timeline |
| Mullen Automotive |
| Weir Group |
Mullen Automotive and Weir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Weir
The main advantage of trading using opposite Mullen Automotive and Weir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Weir 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 Weir will offset losses from the drop in Weir's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| Weir vs. Shanghai Electric Group | Weir vs. Xinjiang Goldwind Science | Weir vs. American Superconductor | Weir vs. Cummins |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |