Correlation Between Allied Corp and Clever Leaves
Can any of the company-specific risk be diversified away by investing in both Allied Corp and Clever Leaves 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 Allied Corp and Clever Leaves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Corp and Clever Leaves Holdings, you can compare the effects of market volatilities on Allied Corp and Clever Leaves 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 Allied Corp with a short position of Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Corp and Clever Leaves.
Diversification Opportunities for Allied Corp and Clever Leaves
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allied and Clever is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Allied Corp and Clever Leaves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clever Leaves Holdings and Allied Corp 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 Allied Corp are associated (or correlated) with Clever Leaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clever Leaves Holdings has no effect on the direction of Allied Corp i.e., Allied Corp and Clever Leaves go up and down completely randomly.
Pair Corralation between Allied Corp and Clever Leaves
Given the investment horizon of 90 days Allied Corp is expected to generate 10.05 times less return on investment than Clever Leaves. But when comparing it to its historical volatility, Allied Corp is 5.98 times less risky than Clever Leaves. It trades about 0.05 of its potential returns per unit of risk. Clever Leaves Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,323 in Clever Leaves Holdings on August 29, 2024 and sell it today you would lose (1,223) from holding Clever Leaves Holdings or give up 92.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Corp vs. Clever Leaves Holdings
Performance |
| Timeline |
| Allied Corp |
| Clever Leaves Holdings |
Allied Corp and Clever Leaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Corp and Clever Leaves
The main advantage of trading using opposite Allied Corp and Clever Leaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Corp position performs unexpectedly, Clever Leaves 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 Clever Leaves will offset losses from the drop in Clever Leaves' long position.| Allied Corp vs. The BC Bud | Allied Corp vs. Amexdrug | Allied Corp vs. Aion Therapeutic | Allied Corp vs. Antisense Therapeutics Limited |
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Check out your portfolio center.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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