Correlation Between Aquagold International and Leafly Holdings
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Leafly Holdings 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 Aquagold International and Leafly Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Leafly Holdings, you can compare the effects of market volatilities on Aquagold International and Leafly Holdings 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 Aquagold International with a short position of Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Leafly Holdings.
Diversification Opportunities for Aquagold International and Leafly Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Leafly is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and Aquagold International 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 Aquagold International are associated (or correlated) with Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of Aquagold International i.e., Aquagold International and Leafly Holdings go up and down completely randomly.
Pair Corralation between Aquagold International and Leafly Holdings
Given the investment horizon of 90 days Aquagold International is expected to generate 2.32 times less return on investment than Leafly Holdings. But when comparing it to its historical volatility, Aquagold International is 1.48 times less risky than Leafly Holdings. It trades about 0.06 of its potential returns per unit of risk. Leafly Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8.78 in Leafly Holdings on September 2, 2024 and sell it today you would lose (6.26) from holding Leafly Holdings or give up 71.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 88.71% |
| Values | Daily Returns |
Aquagold International vs. Leafly Holdings
Performance |
| Timeline |
| Aquagold International |
| Leafly Holdings |
Aquagold International and Leafly Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Leafly Holdings
The main advantage of trading using opposite Aquagold International and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Leafly Holdings 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 Leafly Holdings will offset losses from the drop in Leafly Holdings' long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Leafly Holdings vs. Leafly Holdings | Leafly Holdings vs. WM Technology | Leafly Holdings vs. Revelation Biosciences | Leafly Holdings vs. AEye Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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