Correlation Between Mullen Automotive and Zhejiang Expressway
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive and Zhejiang Expressway 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 Zhejiang Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and Zhejiang Expressway Co, you can compare the effects of market volatilities on Mullen Automotive and Zhejiang Expressway 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 Zhejiang Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and Zhejiang Expressway.
Diversification Opportunities for Mullen Automotive and Zhejiang Expressway
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mullen and Zhejiang is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Zhejiang Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Expressway 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 Zhejiang Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Expressway has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Zhejiang Expressway go up and down completely randomly.
Pair Corralation between Mullen Automotive and Zhejiang Expressway
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Zhejiang Expressway. In addition to that, Mullen Automotive is 4.67 times more volatile than Zhejiang Expressway Co. It trades about -0.27 of its total potential returns per unit of risk. Zhejiang Expressway Co is currently generating about 0.02 per unit of volatility. If you would invest 63.00 in Zhejiang Expressway Co on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Zhejiang Expressway Co or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mullen Automotive vs. Zhejiang Expressway Co
Performance |
| Timeline |
| Mullen Automotive |
| Zhejiang Expressway |
Mullen Automotive and Zhejiang Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and Zhejiang Expressway
The main advantage of trading using opposite Mullen Automotive and Zhejiang Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive position performs unexpectedly, Zhejiang Expressway 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 Zhejiang Expressway will offset losses from the drop in Zhejiang Expressway's long position.| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
| Zhejiang Expressway vs. Verra Mobility Corp | Zhejiang Expressway vs. HUMANA INC | Zhejiang Expressway vs. SCOR PK | Zhejiang Expressway vs. Aquagold International |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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