Correlation Between Everi Holdings and Mullen Automotive

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

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

Diversification Opportunities for Everi Holdings and Mullen Automotive

-0.57

Correlation Coefficient

Everi Holdings  Mullen Automotive

Excellent diversification

The 3 months correlation between Everi and Mullen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Everi Holdings and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive and Everi Holdings 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 Everi Holdings 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 Everi Holdings i.e., Everi Holdings and Mullen Automotive go up and down completely randomly.

Pair Corralation between Everi Holdings and Mullen Automotive

Given the investment horizon of 90 days Everi Holdings is expected to generate 0.01 times more return on investment than Mullen Automotive. However, Everi Holdings is 78.39 times less risky than Mullen Automotive. It trades about 0.25 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.2 per unit of risk. If you would invest  1,310  in Everi Holdings on September 12, 2024 and sell it today you would earn a total of  36.00  from holding Everi Holdings or generate 2.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Everi Holdings  vs.  Mullen Automotive

Everi Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Everi Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Mullen Automotive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mullen Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Everi Holdings and Mullen Automotive

The main advantage of trading using opposite Everi Holdings and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everi Holdings 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.

The idea behind Everi Holdings and Mullen Automotive 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.