Correlation Between PHX Energy and Mullen

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

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

Diversification Opportunities for PHX Energy and Mullen

0.74

Correlation Coefficient

PHX Energy  Mullen

Poor diversification

The 3 months correlation between PHX and Mullen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PHX Energy Services and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and PHX Energy 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 PHX Energy Services are associated (or correlated) with Mullen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of PHX Energy i.e., PHX Energy and Mullen go up and down completely randomly.

Pair Corralation between PHX Energy and Mullen

Assuming the 90 days trading horizon PHX Energy is expected to generate 1.4 times less return on investment than Mullen. In addition to that, PHX Energy is 1.28 times more volatile than Mullen Group. It trades about 0.09 of its total potential returns per unit of risk. Mullen Group is currently generating about 0.17 per unit of volatility. If you would invest  1,227  in Mullen Group on April 23, 2025 and sell it today you would earn a total of  165.00  from holding Mullen Group or generate 13.45% return on investment over 90 days.

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

PHX Energy Services  vs.  Mullen Group

PHX Energy Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHX Energy Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, PHX Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Mullen Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mullen Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Mullen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PHX Energy and Mullen

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

The idea behind PHX Energy Services and Mullen Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.