Correlation Between Café Serendipity and Leafly Holdings
Can any of the company-specific risk be diversified away by investing in both Café Serendipity 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 Café Serendipity and Leafly Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caf Serendipity Holdings and Leafly Holdings, you can compare the effects of market volatilities on Café Serendipity 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 Café Serendipity with a short position of Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Café Serendipity and Leafly Holdings.
Diversification Opportunities for Café Serendipity and Leafly Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Café and Leafly is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Caf Serendipity Holdings and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and Café Serendipity 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 Caf Serendipity Holdings 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 Café Serendipity i.e., Café Serendipity and Leafly Holdings go up and down completely randomly.
Pair Corralation between Café Serendipity and Leafly Holdings
Given the investment horizon of 90 days Caf Serendipity Holdings is expected to generate 8.52 times more return on investment than Leafly Holdings. However, Café Serendipity is 8.52 times more volatile than Leafly Holdings. It trades about 0.06 of its potential returns per unit of risk. Leafly Holdings is currently generating about -0.03 per unit of risk. If you would invest 4.40 in Caf Serendipity Holdings on August 26, 2024 and sell it today you would lose (4.38) from holding Caf Serendipity Holdings or give up 99.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caf Serendipity Holdings vs. Leafly Holdings
Performance |
| Timeline |
| Caf Serendipity Holdings |
| Leafly Holdings |
Café Serendipity and Leafly Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Café Serendipity and Leafly Holdings
The main advantage of trading using opposite Café Serendipity and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Café Serendipity 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.| Café Serendipity vs. Leafly Holdings | Café Serendipity vs. Leafly Holdings | Café Serendipity vs. SunLink Health Systems | Café Serendipity vs. Aquagold International |
| Leafly Holdings vs. Kiaro Holdings Corp | Leafly Holdings vs. Allstar Health Brands | Leafly Holdings vs. Aquagold International | Leafly Holdings vs. Morningstar Unconstrained Allocation |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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