Correlation Between Mulberry Group and London Stock

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

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

Diversification Opportunities for Mulberry Group and London Stock

0.0

Correlation Coefficient

Mulberry Group  London Stock

Pay attention - limited upside

The 3 months correlation between Mulberry and London is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and London Stock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Stock Exchange and Mulberry Group 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 Mulberry Group PLC are associated (or correlated) with London Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Stock Exchange has no effect on the direction of Mulberry Group i.e., Mulberry Group and London Stock go up and down completely randomly.

Pair Corralation between Mulberry Group and London Stock

If you would invest (100.00) in London Stock Exchange on October 6, 2024 and sell it today you would earn a total of  100.00  from holding London Stock Exchange or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mulberry Group PLC  vs.  London Stock Exchange

Mulberry Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mulberry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mulberry Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

London Stock Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days London Stock Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, London Stock is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mulberry Group and London Stock

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

The idea behind Mulberry Group PLC and London Stock Exchange 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.