Correlation Between WeWork and MDJM

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

By analyzing existing cross correlation between WeWork Inc and MDJM, you can compare the effects of market volatilities on WeWork 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 WeWork with a short position of MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of WeWork and MDJM.

Diversification Opportunities for WeWork and MDJM

0.53

Correlation Coefficient

WeWork  MDJM

Very weak diversification

The 3 months correlation between WeWork and MDJM is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding WeWork Inc and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and WeWork 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 WeWork Inc 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 WeWork i.e., WeWork and MDJM go up and down completely randomly.

Pair Corralation between WeWork and MDJM

If you would invest  26.00  in WeWork Inc on September 12, 2024 and sell it today you would earn a total of  0.00  from holding WeWork Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.72%
Values	Daily Returns

WeWork Inc  vs.  MDJM

WeWork Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WeWork Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, WeWork is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with WeWork and MDJM

The main advantage of trading using opposite WeWork and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WeWork 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 WeWork Inc 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.