Correlation Between Benchmark Botanics and Lotus Ventures
Can any of the company-specific risk be diversified away by investing in both Benchmark Botanics and Lotus Ventures 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 Benchmark Botanics and Lotus Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Botanics and Lotus Ventures, you can compare the effects of market volatilities on Benchmark Botanics and Lotus Ventures 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 Benchmark Botanics with a short position of Lotus Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Botanics and Lotus Ventures.
Diversification Opportunities for Benchmark Botanics and Lotus Ventures
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Benchmark and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and Lotus Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Ventures and Benchmark Botanics 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 Benchmark Botanics are associated (or correlated) with Lotus Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Ventures has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and Lotus Ventures go up and down completely randomly.
Pair Corralation between Benchmark Botanics and Lotus Ventures
Assuming the 90 days horizon Benchmark Botanics is expected to generate 1.2 times more return on investment than Lotus Ventures. However, Benchmark Botanics is 1.2 times more volatile than Lotus Ventures. It trades about 0.04 of its potential returns per unit of risk. Lotus Ventures is currently generating about 0.04 per unit of risk. If you would invest 1.10 in Benchmark Botanics on November 2, 2024 and sell it today you would lose (0.76) from holding Benchmark Botanics or give up 69.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 77.69% |
| Values | Daily Returns |
Benchmark Botanics vs. Lotus Ventures
Performance |
| Timeline |
| Benchmark Botanics |
| Lotus Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Benchmark Botanics and Lotus Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Botanics and Lotus Ventures
The main advantage of trading using opposite Benchmark Botanics and Lotus Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Botanics position performs unexpectedly, Lotus Ventures 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 Lotus Ventures will offset losses from the drop in Lotus Ventures' long position.| Benchmark Botanics vs. Speakeasy Cannabis Club | Benchmark Botanics vs. City View Green | Benchmark Botanics vs. BC Craft Supply | Benchmark Botanics vs. Ravenquest Biomed |
| Lotus Ventures vs. Benchmark Botanics | Lotus Ventures vs. Speakeasy Cannabis Club | Lotus Ventures vs. City View Green | Lotus Ventures vs. BC Craft Supply |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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