Correlation Between Mullen Automotive and Hesai Group

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

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

Diversification Opportunities for Mullen Automotive and Hesai Group

-0.95

Correlation Coefficient

Mullen Automotive  Hesai Group

Pay attention - limited upside

The 3 months correlation between Mullen and Hesai is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American and Mullen Automotive 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 Mullen Automotive are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Hesai Group go up and down completely randomly.

Pair Corralation between Mullen Automotive and Hesai Group

Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Hesai Group. In addition to that, Mullen Automotive is 1.71 times more volatile than Hesai Group American. It trades about -0.33 of its total potential returns per unit of risk. Hesai Group American is currently generating about 0.2 per unit of volatility. If you would invest  818.00  in Hesai Group American on November 28, 2024 and sell it today you would earn a total of  1,033  from holding Hesai Group American or generate 126.28% return on investment over 90 days.

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

Mullen Automotive  vs.  Hesai Group American

Mullen Automotive

Risk-Adjusted Performance

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 March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hesai Group American

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hesai Group American are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Hesai Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mullen Automotive and Hesai Group

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

The idea behind Mullen Automotive and Hesai Group American 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.