Correlation Between GreenPower and Mullen

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

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

Diversification Opportunities for GreenPower and Mullen

0.77

Correlation Coefficient

GreenPower  Mullen

Poor diversification

The 3 months correlation between GreenPower and Mullen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and GreenPower 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 GreenPower Motor 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 GreenPower i.e., GreenPower and Mullen go up and down completely randomly.

Pair Corralation between GreenPower and Mullen

Assuming the 90 days horizon GreenPower Motor is expected to under-perform the Mullen. In addition to that, GreenPower is 4.2 times more volatile than Mullen Group. It trades about -0.1 of its total potential returns per unit of risk. Mullen Group is currently generating about -0.17 per unit of volatility. If you would invest  1,548  in Mullen Group on December 1, 2024 and sell it today you would lose (232.00) from holding Mullen Group or give up 14.99% of portfolio value over 90 days.

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

GreenPower Motor  vs.  Mullen Group

GreenPower Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenPower Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Mullen Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GreenPower and Mullen

The main advantage of trading using opposite GreenPower and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower 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 GreenPower Motor 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.