Correlation Between Colabor and MDJM
Can any of the company-specific risk be diversified away by investing in both Colabor 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 Colabor and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colabor Group and MDJM, you can compare the effects of market volatilities on Colabor 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 Colabor with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colabor and MDJM.
Diversification Opportunities for Colabor and MDJM
Very poor diversification
The 3 months correlation between Colabor and MDJM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Colabor Group and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Colabor 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 Colabor Group 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 Colabor i.e., Colabor and MDJM go up and down completely randomly.
Pair Corralation between Colabor and MDJM
Assuming the 90 days horizon Colabor Group is expected to generate 0.28 times more return on investment than MDJM. However, Colabor Group is 3.57 times less risky than MDJM. It trades about 0.04 of its potential returns per unit of risk. MDJM is currently generating about -0.04 per unit of risk. If you would invest 55.00 in Colabor Group on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Colabor Group or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colabor Group vs. MDJM
Performance |
| Timeline |
| Colabor Group |
| MDJM |
Colabor and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colabor and MDJM
The main advantage of trading using opposite Colabor and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colabor 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.| Colabor vs. Federal National Mortgage | Colabor vs. Shinhan Financial Group | Colabor vs. Woori Financial Group | Colabor vs. Grupo Aval |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |