Correlation Between Mulberry Group and Quadrise Plc

Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Quadrise Plc 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 Quadrise Plc 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 Quadrise Plc, you can compare the effects of market volatilities on Mulberry Group and Quadrise Plc 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 Quadrise Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Quadrise Plc.

Diversification Opportunities for Mulberry Group and Quadrise Plc

-0.63

Correlation Coefficient

Mulberry Group  Quadrise Plc

Excellent diversification

The 3 months correlation between Mulberry and Quadrise is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Quadrise Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadrise Plc 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 Quadrise Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadrise Plc has no effect on the direction of Mulberry Group i.e., Mulberry Group and Quadrise Plc go up and down completely randomly.

Pair Corralation between Mulberry Group and Quadrise Plc

Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Quadrise Plc. But the stock apears to be less risky and, when comparing its historical volatility, Mulberry Group PLC is 2.15 times less risky than Quadrise Plc. The stock trades about -0.03 of its potential returns per unit of risk. The Quadrise Plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Quadrise Plc on September 13, 2024 and sell it today you would earn a total of  240.00  from holding Quadrise Plc or generate 150.0% return on investment over 90 days.

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

Mulberry Group PLC  vs.  Quadrise Plc

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 latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Quadrise Plc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quadrise Plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Quadrise Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mulberry Group and Quadrise Plc

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

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