Correlation Between MDJM and Oriental Culture
Can any of the company-specific risk be diversified away by investing in both MDJM and Oriental Culture 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 Oriental Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDJM and Oriental Culture Holding, you can compare the effects of market volatilities on MDJM and Oriental Culture 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 Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and Oriental Culture.
Diversification Opportunities for MDJM and Oriental Culture
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MDJM and Oriental is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and Oriental Culture Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Culture Holding 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 Oriental Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Culture Holding has no effect on the direction of MDJM i.e., MDJM and Oriental Culture go up and down completely randomly.
Pair Corralation between MDJM and Oriental Culture
Given the investment horizon of 90 days MDJM is expected to under-perform the Oriental Culture. In addition to that, MDJM is 1.18 times more volatile than Oriental Culture Holding. It trades about -0.04 of its total potential returns per unit of risk. Oriental Culture Holding is currently generating about -0.01 per unit of volatility. If you would invest 310.00 in Oriental Culture Holding on August 31, 2024 and sell it today you would lose (193.00) from holding Oriental Culture Holding or give up 62.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDJM vs. Oriental Culture Holding
Performance |
| Timeline |
| MDJM |
| Oriental Culture Holding |
MDJM and Oriental Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDJM and Oriental Culture
The main advantage of trading using opposite MDJM and Oriental Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM position performs unexpectedly, Oriental Culture 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 Oriental Culture will offset losses from the drop in Oriental Culture's long position.| MDJM vs. Fangdd Network Group | MDJM vs. Ucommune International | MDJM vs. Redfin Corp | MDJM vs. Offerpad Solutions |
| Oriental Culture vs. Hour Loop | Oriental Culture vs. Jowell Global | Oriental Culture vs. Qurate Retail Series | Oriental Culture vs. Emerge Commerce |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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