Correlation Between FLJ and MDJM

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

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

Diversification Opportunities for FLJ and MDJM

-0.77

Correlation Coefficient

FLJ  MDJM

Pay attention - limited upside

The 3 months correlation between FLJ and MDJM is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding FLJ Group and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM and FLJ 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 FLJ Group 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 FLJ i.e., FLJ and MDJM go up and down completely randomly.

Pair Corralation between FLJ and MDJM

If you would invest  119.00  in FLJ Group on September 3, 2024 and sell it today you would earn a total of  0.00  from holding FLJ Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

FLJ Group  vs.  MDJM

FLJ Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FLJ Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady essential indicators, FLJ is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

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 FLJ and MDJM

The main advantage of trading using opposite FLJ and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLJ 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 FLJ Group 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.