Correlation Between Mullen Automotive and Hyzon Motors

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

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

Diversification Opportunities for Mullen Automotive and Hyzon Motors

0.65

Correlation Coefficient

Mullen Automotive  Hyzon Motors

Poor diversification

The 3 months correlation between Mullen and Hyzon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors 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 Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of Mullen Automotive i.e., Mullen Automotive and Hyzon Motors go up and down completely randomly.

Pair Corralation between Mullen Automotive and Hyzon Motors

Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the Hyzon Motors. In addition to that, Mullen Automotive is 2.17 times more volatile than Hyzon Motors. It trades about -0.51 of its total potential returns per unit of risk. Hyzon Motors is currently generating about -0.24 per unit of volatility. If you would invest  107.00  in Hyzon Motors on December 28, 2024 and sell it today you would lose (43.00) from holding Hyzon Motors or give up 40.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	43.33%
Values	Daily Returns

Mullen Automotive  vs.  Hyzon Motors

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

Hyzon Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyzon Motors 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 basic 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 Mullen Automotive and Hyzon Motors

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

The idea behind Mullen Automotive and Hyzon Motors 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.