Correlation Between Innovative Food and MDJM
Can any of the company-specific risk be diversified away by investing in both Innovative Food 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 Innovative Food and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Food Hldg and MDJM, you can compare the effects of market volatilities on Innovative Food 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 Innovative Food with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Food and MDJM.
Diversification Opportunities for Innovative Food and MDJM
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Innovative and MDJM is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Food Hldg and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Innovative Food 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 Innovative Food Hldg 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 Innovative Food i.e., Innovative Food and MDJM go up and down completely randomly.
Pair Corralation between Innovative Food and MDJM
Given the investment horizon of 90 days Innovative Food Hldg is expected to generate 0.39 times more return on investment than MDJM. However, Innovative Food Hldg is 2.53 times less risky than MDJM. It trades about 0.14 of its potential returns per unit of risk. MDJM is currently generating about -0.03 per unit of risk. If you would invest 70.00 in Innovative Food Hldg on November 3, 2024 and sell it today you would earn a total of 140.00 from holding Innovative Food Hldg or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.13% |
| Values | Daily Returns |
Innovative Food Hldg vs. MDJM
Performance |
| Timeline |
| Innovative Food Hldg |
| MDJM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Innovative Food and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Food and MDJM
The main advantage of trading using opposite Innovative Food and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Food 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.| Innovative Food vs. Organto Foods | Innovative Food vs. Colabor Group | Innovative Food vs. Bunzl plc | Innovative Food vs. Hf Foods Group |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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