Correlation Between Trellus Health and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both Trellus Health and Mulberry Group 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 Trellus Health and Mulberry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Mulberry Group PLC, you can compare the effects of market volatilities on Trellus Health and Mulberry Group 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 Trellus Health with a short position of Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Mulberry Group.
Diversification Opportunities for Trellus Health and Mulberry Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trellus and Mulberry is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC and Trellus Health 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 Trellus Health plc are associated (or correlated) with Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Trellus Health i.e., Trellus Health and Mulberry Group go up and down completely randomly.
Pair Corralation between Trellus Health and Mulberry Group
Assuming the 90 days trading horizon Trellus Health plc is expected to under-perform the Mulberry Group. But the stock apears to be less risky and, when comparing its historical volatility, Trellus Health plc is 1.37 times less risky than Mulberry Group. The stock trades about -0.11 of its potential returns per unit of risk. The Mulberry Group PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 10,750 in Mulberry Group PLC on September 12, 2024 and sell it today you would lose (750.00) from holding Mulberry Group PLC or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Mulberry Group PLC
Performance |
| Timeline |
| Trellus Health plc |
| Mulberry Group PLC |
Trellus Health and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Mulberry Group
The main advantage of trading using opposite Trellus Health and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| Trellus Health vs. Mulberry Group PLC | Trellus Health vs. Ikigai Ventures | Trellus Health vs. Neometals | Trellus Health vs. Coor Service Management |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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