Correlation Between Stellar and MJ International

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

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

Diversification Opportunities for Stellar and MJ International

-0.74

Correlation Coefficient

Stellar  MJ International

Pay attention - limited upside

The 3 months correlation between Stellar and 8466 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and MJ International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MJ International and Stellar 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 Stellar are associated (or correlated) with MJ International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MJ International has no effect on the direction of Stellar i.e., Stellar and MJ International go up and down completely randomly.

Pair Corralation between Stellar and MJ International

Assuming the 90 days trading horizon Stellar is expected to generate 3.63 times more return on investment than MJ International. However, Stellar is 3.63 times more volatile than MJ International Co. It trades about 0.14 of its potential returns per unit of risk. MJ International Co is currently generating about -0.03 per unit of risk. If you would invest  11.00  in Stellar on October 9, 2024 and sell it today you would earn a total of  31.00  from holding Stellar or generate 281.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.23%
Values	Daily Returns

Stellar  vs.  MJ International Co

Stellar

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

MJ International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MJ International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic 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.

Pair Trading with Stellar and MJ International

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

The idea behind Stellar and MJ International Co 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.