Correlation Between MKDWELL Tech and Crexendo

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

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

Diversification Opportunities for MKDWELL Tech and Crexendo

-0.52

Correlation Coefficient

MKDWELL Tech  Crexendo

Excellent diversification

The 3 months correlation between MKDWELL and Crexendo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding MKDWELL Tech Ordinary and Crexendo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crexendo and MKDWELL Tech 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 MKDWELL Tech Ordinary are associated (or correlated) with Crexendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crexendo has no effect on the direction of MKDWELL Tech i.e., MKDWELL Tech and Crexendo go up and down completely randomly.

Pair Corralation between MKDWELL Tech and Crexendo

Given the investment horizon of 90 days MKDWELL Tech Ordinary is expected to generate 4.47 times more return on investment than Crexendo. However, MKDWELL Tech is 4.47 times more volatile than Crexendo. It trades about 0.08 of its potential returns per unit of risk. Crexendo is currently generating about 0.02 per unit of risk. If you would invest  89.00  in MKDWELL Tech Ordinary on September 25, 2024 and sell it today you would earn a total of  7.00  from holding MKDWELL Tech Ordinary or generate 7.87% return on investment over 90 days.

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

MKDWELL Tech Ordinary  vs.  Crexendo

MKDWELL Tech Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MKDWELL Tech Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Crexendo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crexendo are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Crexendo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MKDWELL Tech and Crexendo

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

The idea behind MKDWELL Tech Ordinary and Crexendo 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.