Correlation Between Phunware and Mullen Automotive
Can any of the company-specific risk be diversified away by investing in both Phunware and Mullen Automotive 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 Phunware and Mullen Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phunware and Mullen Automotive, you can compare the effects of market volatilities on Phunware and Mullen Automotive 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 Phunware with a short position of Mullen Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phunware and Mullen Automotive.
Diversification Opportunities for Phunware and Mullen Automotive
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phunware and Mullen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Phunware and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive and Phunware 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 Phunware are associated (or correlated) with Mullen Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Automotive has no effect on the direction of Phunware i.e., Phunware and Mullen Automotive go up and down completely randomly.
Pair Corralation between Phunware and Mullen Automotive
Given the investment horizon of 90 days Phunware is expected to under-perform the Mullen Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Phunware is 2.13 times less risky than Mullen Automotive. The stock trades about -0.38 of its potential returns per unit of risk. The Mullen Automotive is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 253.00 in Mullen Automotive on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Mullen Automotive or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phunware vs. Mullen Automotive
Performance |
| Timeline |
| Phunware |
| Mullen Automotive |
Phunware and Mullen Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phunware and Mullen Automotive
The main advantage of trading using opposite Phunware and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phunware position performs unexpectedly, Mullen Automotive 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 Mullen Automotive will offset losses from the drop in Mullen Automotive's long position.| Phunware vs. HeartCore Enterprises | Phunware vs. Beamr Imaging Ltd | Phunware vs. AMTD Digital | Phunware vs. CXApp Inc |
| Mullen Automotive vs. Hycroft Mining Holding | Mullen Automotive vs. Imperial Petroleum | Mullen Automotive vs. Camber Energy |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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