Correlation Between Avalon GloboCare and MDJM
Can any of the company-specific risk be diversified away by investing in both Avalon GloboCare and MDJM 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 Avalon GloboCare and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalon GloboCare Corp and MDJM, you can compare the effects of market volatilities on Avalon GloboCare and MDJM 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 Avalon GloboCare with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalon GloboCare and MDJM.
Diversification Opportunities for Avalon GloboCare and MDJM
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avalon and MDJM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Avalon GloboCare Corp and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Avalon GloboCare 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 Avalon GloboCare Corp are associated (or correlated) with MDJM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDJM has no effect on the direction of Avalon GloboCare i.e., Avalon GloboCare and MDJM go up and down completely randomly.
Pair Corralation between Avalon GloboCare and MDJM
Given the investment horizon of 90 days Avalon GloboCare Corp is expected to generate 2.19 times more return on investment than MDJM. However, Avalon GloboCare is 2.19 times more volatile than MDJM. It trades about 0.01 of its potential returns per unit of risk. MDJM is currently generating about -0.02 per unit of risk. If you would invest 4,950 in Avalon GloboCare Corp on August 28, 2024 and sell it today you would lose (4,680) from holding Avalon GloboCare Corp or give up 94.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalon GloboCare Corp vs. MDJM
Performance |
| Timeline |
| Avalon GloboCare Corp |
| MDJM |
Avalon GloboCare and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalon GloboCare and MDJM
The main advantage of trading using opposite Avalon GloboCare and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalon GloboCare position performs unexpectedly, MDJM 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 MDJM will offset losses from the drop in MDJM's long position.| Avalon GloboCare vs. Ascendas India Trust | Avalon GloboCare vs. Asia Pptys | Avalon GloboCare vs. Adler Group SA | Avalon GloboCare vs. Aztec Land Comb |
| MDJM vs. Fangdd Network Group | MDJM vs. Ucommune International | MDJM vs. Ohmyhome Limited Ordinary | MDJM vs. Southcorp Capital |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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