Correlation Between Cannabis Global and Leef Brands
Can any of the company-specific risk be diversified away by investing in both Cannabis Global and Leef Brands 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 Cannabis Global and Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Global and Leef Brands, you can compare the effects of market volatilities on Cannabis Global and Leef Brands 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 Cannabis Global with a short position of Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Global and Leef Brands.
Diversification Opportunities for Cannabis Global and Leef Brands
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cannabis and Leef is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Global and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands and Cannabis Global 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 Cannabis Global are associated (or correlated) with Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of Cannabis Global i.e., Cannabis Global and Leef Brands go up and down completely randomly.
Pair Corralation between Cannabis Global and Leef Brands
Given the investment horizon of 90 days Cannabis Global is expected to generate 27.38 times more return on investment than Leef Brands. However, Cannabis Global is 27.38 times more volatile than Leef Brands. It trades about 0.27 of its potential returns per unit of risk. Leef Brands is currently generating about 0.05 per unit of risk. If you would invest 0.01 in Cannabis Global on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Cannabis Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannabis Global vs. Leef Brands
Performance |
| Timeline |
| Cannabis Global |
| Leef Brands |
Cannabis Global and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Global and Leef Brands
The main advantage of trading using opposite Cannabis Global and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Global position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' long position.| Cannabis Global vs. Green Cures Botanical | Cannabis Global vs. Cann American Corp | Cannabis Global vs. Rimrock Gold Corp | Cannabis Global vs. Galexxy Holdings |
| Leef Brands vs. Apple Inc | Leef Brands vs. Microsoft | Leef Brands vs. Alphabet Inc Class C | Leef Brands vs. Meta Platforms |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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