Correlation Between MDJM and Anywhere Real

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

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

Diversification Opportunities for MDJM and Anywhere Real

0.14

Correlation Coefficient

MDJM  Anywhere Real

Average diversification

The 3 months correlation between MDJM and Anywhere is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and Anywhere Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anywhere Real Estate and MDJM 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 MDJM are associated (or correlated) with Anywhere Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anywhere Real Estate has no effect on the direction of MDJM i.e., MDJM and Anywhere Real go up and down completely randomly.

Pair Corralation between MDJM and Anywhere Real

Given the investment horizon of 90 days MDJM is expected to generate 3.52 times more return on investment than Anywhere Real. However, MDJM is 3.52 times more volatile than Anywhere Real Estate. It trades about -0.11 of its potential returns per unit of risk. Anywhere Real Estate is currently generating about -0.66 per unit of risk. If you would invest  23.00  in MDJM on October 12, 2024 and sell it today you would lose (4.00) from holding MDJM or give up 17.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.0%
Values	Daily Returns

MDJM  vs.  Anywhere Real Estate

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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Anywhere Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anywhere Real Estate 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 comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MDJM and Anywhere Real

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

The idea behind MDJM and Anywhere Real Estate 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.