Correlation Between Daily Journal and MMTEC

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

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

Diversification Opportunities for Daily Journal and MMTEC

-0.72

Correlation Coefficient

Daily Journal  MMTEC

Pay attention - limited upside

The 3 months correlation between Daily and MMTEC is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and MMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMTEC Inc and Daily Journal 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 Daily Journal Corp are associated (or correlated) with MMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMTEC Inc has no effect on the direction of Daily Journal i.e., Daily Journal and MMTEC go up and down completely randomly.

Pair Corralation between Daily Journal and MMTEC

Given the investment horizon of 90 days Daily Journal Corp is expected to generate 0.36 times more return on investment than MMTEC. However, Daily Journal Corp is 2.8 times less risky than MMTEC. It trades about 0.06 of its potential returns per unit of risk. MMTEC Inc is currently generating about -0.11 per unit of risk. If you would invest  48,200  in Daily Journal Corp on October 15, 2024 and sell it today you would earn a total of  3,661  from holding Daily Journal Corp or generate 7.6% return on investment over 90 days.

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

Daily Journal Corp  vs.  MMTEC Inc

Daily Journal Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Daily Journal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MMTEC Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MMTEC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Daily Journal and MMTEC

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

The idea behind Daily Journal Corp and MMTEC Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.