Correlation Between Fitipower Integrated and MJ International

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

By analyzing existing cross correlation between Fitipower Integrated Technology and MJ International Co, you can compare the effects of market volatilities on Fitipower Integrated and MJ International 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 Fitipower Integrated with a short position of MJ International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fitipower Integrated and MJ International.

Diversification Opportunities for Fitipower Integrated and MJ International

0.18

Correlation Coefficient

Fitipower Integrated  MJ International

Average diversification

The 3 months correlation between Fitipower and 8466 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fitipower Integrated Technolog and MJ International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MJ International and Fitipower Integrated 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 Fitipower Integrated Technology are associated (or correlated) with MJ International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MJ International has no effect on the direction of Fitipower Integrated i.e., Fitipower Integrated and MJ International go up and down completely randomly.

Pair Corralation between Fitipower Integrated and MJ International

Assuming the 90 days trading horizon Fitipower Integrated Technology is expected to under-perform the MJ International. But the stock apears to be less risky and, when comparing its historical volatility, Fitipower Integrated Technology is 1.33 times less risky than MJ International. The stock trades about -0.11 of its potential returns per unit of risk. The MJ International Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,015  in MJ International Co on December 24, 2024 and sell it today you would lose (120.00) from holding MJ International Co or give up 2.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fitipower Integrated Technolog  vs.  MJ International Co

Fitipower Integrated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fitipower Integrated Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

MJ International

Risk-Adjusted Performance

Very Weak

Over the last 90 days MJ International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, MJ International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fitipower Integrated and MJ International

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

The idea behind Fitipower Integrated Technology and MJ International Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.