Correlation Between MDJM and FLJ

Can any of the company-specific risk be diversified away by investing in both MDJM and FLJ 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 FLJ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MDJM and FLJ Group, you can compare the effects of market volatilities on MDJM and FLJ 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 FLJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and FLJ.

Diversification Opportunities for MDJM and FLJ

-0.76

Correlation Coefficient

MDJM  FLJ

Pay attention - limited upside

The 3 months correlation between MDJM and FLJ is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and FLJ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLJ Group 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 FLJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLJ Group has no effect on the direction of MDJM i.e., MDJM and FLJ go up and down completely randomly.

Pair Corralation between MDJM and FLJ

If you would invest  17.00  in MDJM on September 5, 2024 and sell it today you would lose (1.00) from holding MDJM or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

MDJM  vs.  FLJ Group

MDJM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MDJM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

FLJ Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FLJ Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady essential indicators, FLJ is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with MDJM and FLJ

The main advantage of trading using opposite MDJM and FLJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM position performs unexpectedly, FLJ 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 FLJ will offset losses from the drop in FLJ's long position.

The idea behind MDJM and FLJ Group 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.