Correlation Between Compass and MDJM
Can any of the company-specific risk be diversified away by investing in both Compass 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 Compass and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass and MDJM, you can compare the effects of market volatilities on Compass 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 Compass with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass and MDJM.
Diversification Opportunities for Compass and MDJM
Excellent diversification
The 3 months correlation between Compass and MDJM is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Compass and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Compass 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 Compass 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 Compass i.e., Compass and MDJM go up and down completely randomly.
Pair Corralation between Compass and MDJM
Given the investment horizon of 90 days Compass is expected to generate 5.7 times less return on investment than MDJM. But when comparing it to its historical volatility, Compass is 4.19 times less risky than MDJM. It trades about 0.04 of its potential returns per unit of risk. MDJM is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20.00 in MDJM on November 7, 2024 and sell it today you would lose (1.00) from holding MDJM or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass vs. MDJM
Performance |
| Timeline |
| Compass |
| MDJM |
Compass and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass and MDJM
The main advantage of trading using opposite Compass and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass 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.The idea behind Compass and MDJM 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.| MDJM vs. Playtika Holding Corp | MDJM vs. GameStop Corp | MDJM vs. EMCORE | MDJM vs. Nordic Semiconductor ASA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |