Correlation Between BC Bud and Clever Leaves
Can any of the company-specific risk be diversified away by investing in both BC Bud 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 BC Bud and Clever Leaves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The BC Bud and Clever Leaves Holdings, you can compare the effects of market volatilities on BC Bud 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 BC Bud with a short position of Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Bud and Clever Leaves.
Diversification Opportunities for BC Bud and Clever Leaves
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BCBCF and Clever is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The BC Bud 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 BC Bud 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 The BC Bud 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 BC Bud i.e., BC Bud and Clever Leaves go up and down completely randomly.
Pair Corralation between BC Bud and Clever Leaves
Assuming the 90 days horizon BC Bud is expected to generate 7.48 times less return on investment than Clever Leaves. But when comparing it to its historical volatility, The BC Bud is 4.15 times less risky than Clever Leaves. It trades about 0.06 of its potential returns per unit of risk. Clever Leaves Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 252.00 in Clever Leaves Holdings on September 1, 2024 and sell it today you would lose (152.00) from holding Clever Leaves Holdings or give up 60.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The BC Bud vs. Clever Leaves Holdings
Performance |
| Timeline |
| BC Bud |
| Clever Leaves Holdings |
BC Bud and Clever Leaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BC Bud and Clever Leaves
The main advantage of trading using opposite BC Bud and Clever Leaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BC Bud 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.The idea behind The BC Bud and Clever Leaves Holdings 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.| Clever Leaves vs. Flora Growth Corp | Clever Leaves vs. AgriFORCE Growing Systems | Clever Leaves vs. Greenlane Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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