Correlation Between Dear Cashmere and Mojo Data

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

By analyzing existing cross correlation between Dear Cashmere Holding and Mojo Data Solutions, you can compare the effects of market volatilities on Dear Cashmere and Mojo Data 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 Dear Cashmere with a short position of Mojo Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dear Cashmere and Mojo Data.

Diversification Opportunities for Dear Cashmere and Mojo Data

0.36

Correlation Coefficient

Dear Cashmere  Mojo Data

Weak diversification

The 3 months correlation between Dear and Mojo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dear Cashmere Holding and Mojo Data Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mojo Data Solutions and Dear Cashmere 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 Dear Cashmere Holding are associated (or correlated) with Mojo Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mojo Data Solutions has no effect on the direction of Dear Cashmere i.e., Dear Cashmere and Mojo Data go up and down completely randomly.

Pair Corralation between Dear Cashmere and Mojo Data

Given the investment horizon of 90 days Dear Cashmere Holding is expected to under-perform the Mojo Data. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dear Cashmere Holding is 14.08 times less risky than Mojo Data. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Mojo Data Solutions is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.61  in Mojo Data Solutions on October 11, 2024 and sell it today you would lose (0.54) from holding Mojo Data Solutions or give up 88.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Dear Cashmere Holding  vs.  Mojo Data Solutions

Dear Cashmere Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dear Cashmere Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Mojo Data Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mojo Data Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Mojo Data unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dear Cashmere and Mojo Data

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

The idea behind Dear Cashmere Holding and Mojo Data Solutions 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.