Correlation Between MDJM and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both MDJM and Bunzl Plc 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 MDJM and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDJM and Bunzl plc, you can compare the effects of market volatilities on MDJM and Bunzl Plc 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 MDJM with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and Bunzl Plc.
Diversification Opportunities for MDJM and Bunzl Plc
Very weak diversification
The 3 months correlation between MDJM and Bunzl is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and MDJM 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 MDJM are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of MDJM i.e., MDJM and Bunzl Plc go up and down completely randomly.
Pair Corralation between MDJM and Bunzl Plc
Given the investment horizon of 90 days MDJM is expected to under-perform the Bunzl Plc. In addition to that, MDJM is 4.53 times more volatile than Bunzl plc. It trades about -0.66 of its total potential returns per unit of risk. Bunzl plc is currently generating about 0.03 per unit of volatility. If you would invest 2,084 in Bunzl plc on October 23, 2024 and sell it today you would earn a total of 8.00 from holding Bunzl plc or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.78% |
| Values | Daily Returns |
MDJM vs. Bunzl plc
Performance |
| Timeline |
| MDJM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bunzl plc |
MDJM and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDJM and Bunzl Plc
The main advantage of trading using opposite MDJM and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| MDJM vs. Fangdd Network Group | MDJM vs. Ucommune International | MDJM vs. Ohmyhome Limited Ordinary | MDJM vs. Southcorp Capital |
| Bunzl Plc vs. Associated British Foods | Bunzl Plc vs. Compass Group PLC | Bunzl Plc vs. Ashtead Gro | Bunzl Plc vs. Kerry Group PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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