Correlation Between MDJM and New Concept
Can any of the company-specific risk be diversified away by investing in both MDJM and New Concept 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 New Concept into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDJM and New Concept Energy, you can compare the effects of market volatilities on MDJM and New Concept 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 New Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and New Concept.
Diversification Opportunities for MDJM and New Concept
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MDJM and New is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and New Concept Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Concept Energy 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 New Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Concept Energy has no effect on the direction of MDJM i.e., MDJM and New Concept go up and down completely randomly.
Pair Corralation between MDJM and New Concept
Given the investment horizon of 90 days MDJM is expected to under-perform the New Concept. In addition to that, MDJM is 4.49 times more volatile than New Concept Energy. It trades about -0.17 of its total potential returns per unit of risk. New Concept Energy is currently generating about 0.07 per unit of volatility. If you would invest 114.00 in New Concept Energy on August 28, 2024 and sell it today you would earn a total of 8.00 from holding New Concept Energy or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDJM vs. New Concept Energy
Performance |
| Timeline |
| MDJM |
| New Concept Energy |
MDJM and New Concept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDJM and New Concept
The main advantage of trading using opposite MDJM and New Concept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM position performs unexpectedly, New Concept 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 New Concept will offset losses from the drop in New Concept's long position.| MDJM vs. Fangdd Network Group | MDJM vs. Ucommune International | MDJM vs. Ohmyhome Limited Ordinary | MDJM vs. Southcorp Capital |
| New Concept vs. Marcus Millichap | New Concept vs. Frp Holdings Ord | New Concept vs. Maui Land Pineapple | New Concept vs. Wetouch Technology Common |
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 CEOs Directory module to screen CEOs from public companies around the world.
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