Correlation Between Xpeng and Mullen Automotive
Can any of the company-specific risk be diversified away by investing in both Xpeng and Mullen Automotive 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 Xpeng and Mullen Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xpeng Inc and Mullen Automotive, you can compare the effects of market volatilities on Xpeng and Mullen Automotive 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 Xpeng with a short position of Mullen Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xpeng and Mullen Automotive.
Diversification Opportunities for Xpeng and Mullen Automotive
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xpeng and Mullen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xpeng Inc and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive and Xpeng 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 Xpeng Inc are associated (or correlated) with Mullen Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Automotive has no effect on the direction of Xpeng i.e., Xpeng and Mullen Automotive go up and down completely randomly.
Pair Corralation between Xpeng and Mullen Automotive
Given the investment horizon of 90 days Xpeng Inc is expected to generate 0.1 times more return on investment than Mullen Automotive. However, Xpeng Inc is 10.48 times less risky than Mullen Automotive. It trades about 0.01 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.24 per unit of risk. If you would invest 1,918 in Xpeng Inc on May 7, 2025 and sell it today you would lose (32.00) from holding Xpeng Inc or give up 1.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xpeng Inc vs. Mullen Automotive
Performance |
Timeline |
Xpeng Inc |
Mullen Automotive |
Xpeng and Mullen Automotive Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xpeng and Mullen Automotive
The main advantage of trading using opposite Xpeng and Mullen Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpeng position performs unexpectedly, Mullen Automotive 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 Automotive will offset losses from the drop in Mullen Automotive's long position.The idea behind Xpeng Inc and Mullen Automotive 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.Mullen Automotive vs. Nu Ride | Mullen Automotive vs. Lucid Group | Mullen Automotive vs. Xpeng Inc | Mullen Automotive vs. Hycroft Mining Holding |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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