Correlation Between Capital Properties and MDJM

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

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

Diversification Opportunities for Capital Properties and MDJM

0.0

Correlation Coefficient

Capital Properties  MDJM

Pay attention - limited upside

The 3 months correlation between Capital and MDJM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Properties and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and Capital Properties 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 Capital Properties 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 Capital Properties i.e., Capital Properties and MDJM go up and down completely randomly.

Pair Corralation between Capital Properties and MDJM

If you would invest  23.00  in MDJM on December 19, 2024 and sell it today you would lose (7.00) from holding MDJM or give up 30.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Capital Properties  vs.  MDJM

Capital Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capital Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Capital Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

MDJM

Risk-Adjusted Performance

Very Weak

Over the last 90 days MDJM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady forward-looking signals, MDJM may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Capital Properties and MDJM

The main advantage of trading using opposite Capital Properties and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Properties 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 Capital Properties 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.