Correlation Between MDJM and Innovative Food
Can any of the company-specific risk be diversified away by investing in both MDJM and Innovative Food 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 Innovative Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDJM and Innovative Food Hldg, you can compare the effects of market volatilities on MDJM and Innovative Food 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 Innovative Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and Innovative Food.
Diversification Opportunities for MDJM and Innovative Food
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MDJM and Innovative is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and Innovative Food Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Food Hldg 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 Innovative Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Food Hldg has no effect on the direction of MDJM i.e., MDJM and Innovative Food go up and down completely randomly.
Pair Corralation between MDJM and Innovative Food
Given the investment horizon of 90 days MDJM is expected to under-perform the Innovative Food. In addition to that, MDJM is 2.53 times more volatile than Innovative Food Hldg. It trades about -0.03 of its total potential returns per unit of risk. Innovative Food Hldg is currently generating about 0.14 per unit of volatility. 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 |
MDJM vs. Innovative Food Hldg
Performance |
| Timeline |
| MDJM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Innovative Food Hldg |
MDJM and Innovative Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDJM and Innovative Food
The main advantage of trading using opposite MDJM and Innovative Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM position performs unexpectedly, Innovative Food 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 Innovative Food will offset losses from the drop in Innovative Food's long position.| MDJM vs. Fangdd Network Group | MDJM vs. Ucommune International | MDJM vs. Ohmyhome Limited Ordinary | MDJM vs. Southcorp Capital |
| Innovative Food vs. Organto Foods | Innovative Food vs. Colabor Group | Innovative Food vs. Bunzl plc | Innovative Food vs. Hf Foods Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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