Correlation Between Worksport and Mullen Automotive
Can any of the company-specific risk be diversified away by investing in both Worksport 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 Worksport and Mullen Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worksport and Mullen Automotive, you can compare the effects of market volatilities on Worksport 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 Worksport with a short position of Mullen Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worksport and Mullen Automotive.
Diversification Opportunities for Worksport and Mullen Automotive
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Worksport and Mullen is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Worksport and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive and Worksport 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 Worksport 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 Worksport i.e., Worksport and Mullen Automotive go up and down completely randomly.
Pair Corralation between Worksport and Mullen Automotive
Given the investment horizon of 90 days Worksport is expected to generate 0.54 times more return on investment than Mullen Automotive. However, Worksport is 1.84 times less risky than Mullen Automotive. It trades about 0.08 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.57 per unit of risk. If you would invest 92.00 in Worksport on November 1, 2024 and sell it today you would earn a total of 6.20 from holding Worksport or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worksport vs. Mullen Automotive
Performance |
| Timeline |
| Worksport |
| Mullen Automotive |
Worksport and Mullen Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worksport and Mullen Automotive
The main advantage of trading using opposite Worksport and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worksport 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.| Worksport vs. Aeye Inc | Worksport vs. Luminar Technologies | Worksport vs. Modine Manufacturing | Worksport vs. Quantumscape Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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