Correlation Between Douglas Elliman and MDJM
Can any of the company-specific risk be diversified away by investing in both Douglas Elliman 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 Douglas Elliman and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Elliman and MDJM, you can compare the effects of market volatilities on Douglas Elliman 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 Douglas Elliman with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Elliman and MDJM.
Diversification Opportunities for Douglas Elliman and MDJM
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Douglas and MDJM is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Douglas Elliman 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 Douglas Elliman 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 Douglas Elliman i.e., Douglas Elliman and MDJM go up and down completely randomly.
Pair Corralation between Douglas Elliman and MDJM
Given the investment horizon of 90 days Douglas Elliman is expected to under-perform the MDJM. But the stock apears to be less risky and, when comparing its historical volatility, Douglas Elliman is 2.91 times less risky than MDJM. The stock trades about -0.29 of its potential returns per unit of risk. The MDJM is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 22.00 in MDJM on October 15, 2024 and sell it today you would lose (3.00) from holding MDJM or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Douglas Elliman vs. MDJM
Performance |
| Timeline |
| Douglas Elliman |
| MDJM |
Douglas Elliman and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Elliman and MDJM
The main advantage of trading using opposite Douglas Elliman and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Elliman 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.| Douglas Elliman vs. Frp Holdings Ord | Douglas Elliman vs. Marcus Millichap | Douglas Elliman vs. Transcontinental Realty Investors | Douglas Elliman vs. Fathom Holdings |
| MDJM vs. Old Republic International | MDJM vs. Selective Insurance Group | MDJM vs. SLR Investment Corp | MDJM vs. Cincinnati Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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