Correlation Between MKDWELL Tech and NFT

Can any of the company-specific risk be diversified away by investing in both MKDWELL Tech and NFT 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 NFT 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 NFT Limited, you can compare the effects of market volatilities on MKDWELL Tech and NFT 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 NFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKDWELL Tech and NFT.

Diversification Opportunities for MKDWELL Tech and NFT

0.52

Correlation Coefficient

MKDWELL Tech  NFT

Very weak diversification

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

Pair Corralation between MKDWELL Tech and NFT

Given the investment horizon of 90 days MKDWELL Tech Ordinary is expected to generate 0.77 times more return on investment than NFT. However, MKDWELL Tech Ordinary is 1.3 times less risky than NFT. It trades about 0.04 of its potential returns per unit of risk. NFT Limited is currently generating about -0.01 per unit of risk. If you would invest  78.00  in MKDWELL Tech Ordinary on October 5, 2024 and sell it today you would lose (3.00) from holding MKDWELL Tech Ordinary or give up 3.85% of portfolio value over 90 days.

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

MKDWELL Tech Ordinary  vs.  NFT Limited

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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

NFT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NFT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, NFT is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MKDWELL Tech and NFT

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

The idea behind MKDWELL Tech Ordinary and NFT Limited 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.