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

0.71

Correlation Coefficient

Xpeng  Mullen Automotive

Poor diversification

The 3 months correlation between Xpeng and Mullen is 0.71. 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 9.91 times less risky than Mullen Automotive. It trades about 0.02 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.21 per unit of risk. If you would invest  1,918  in Xpeng Inc on May 7, 2025 and sell it today you would earn a total of  11.00  from holding Xpeng Inc or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Xpeng Inc  vs.  Mullen Automotive

Xpeng Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xpeng Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, Xpeng is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mullen Automotive

Risk-Adjusted Performance

Weakest

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

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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.