Correlation Between Calian Technologies and Mullen

Can any of the company-specific risk be diversified away by investing in both Calian Technologies and Mullen 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 Calian Technologies and Mullen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calian Technologies and Mullen Group, you can compare the effects of market volatilities on Calian Technologies and Mullen 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 Calian Technologies with a short position of Mullen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calian Technologies and Mullen.

Diversification Opportunities for Calian Technologies and Mullen

0.12

Correlation Coefficient

Calian Technologies  Mullen

Average diversification

The 3 months correlation between Calian and Mullen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and Calian Technologies 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 Calian Technologies are associated (or correlated) with Mullen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Calian Technologies i.e., Calian Technologies and Mullen go up and down completely randomly.

Pair Corralation between Calian Technologies and Mullen

Assuming the 90 days trading horizon Calian Technologies is expected to under-perform the Mullen. But the stock apears to be less risky and, when comparing its historical volatility, Calian Technologies is 1.13 times less risky than Mullen. The stock trades about -0.03 of its potential returns per unit of risk. The Mullen Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,411  in Mullen Group on October 9, 2024 and sell it today you would earn a total of  93.00  from holding Mullen Group or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Calian Technologies  vs.  Mullen Group

Calian Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calian Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Calian Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mullen Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mullen Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Mullen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Calian Technologies and Mullen

The main advantage of trading using opposite Calian Technologies and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calian Technologies position performs unexpectedly, Mullen 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 will offset losses from the drop in Mullen's long position.

The idea behind Calian Technologies and Mullen Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.