Correlation Between Chia and MDJM
Can any of the company-specific risk be diversified away by investing in both Chia 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 Chia and MDJM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and MDJM, you can compare the effects of market volatilities on Chia 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 Chia with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and MDJM.
Diversification Opportunities for Chia and MDJM
Excellent diversification
The 3 months correlation between Chia and MDJM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chia and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Chia 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 Chia 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 Chia i.e., Chia and MDJM go up and down completely randomly.
Pair Corralation between Chia and MDJM
Assuming the 90 days trading horizon Chia is expected to under-perform the MDJM. But the crypto coin apears to be less risky and, when comparing its historical volatility, Chia is 1.48 times less risky than MDJM. The crypto coin trades about -0.04 of its potential returns per unit of risk. The MDJM is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in MDJM on October 28, 2024 and sell it today you would earn a total of 1.00 from holding MDJM or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.7% |
| Values | Daily Returns |
Chia vs. MDJM
Performance |
| Timeline |
| Chia |
| MDJM |
Chia and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and MDJM
The main advantage of trading using opposite Chia and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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.The idea behind Chia and MDJM pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MDJM vs. Nasdaq Inc | MDJM vs. Definitive Healthcare Corp | MDJM vs. SmartStop Self Storage | MDJM vs. Cadence Design Systems |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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