Correlation Between Clever Leaves and Benchmark Botanics
Can any of the company-specific risk be diversified away by investing in both Clever Leaves and Benchmark Botanics 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 Clever Leaves and Benchmark Botanics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clever Leaves Holdings and Benchmark Botanics, you can compare the effects of market volatilities on Clever Leaves and Benchmark Botanics 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 Clever Leaves with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clever Leaves and Benchmark Botanics.
Diversification Opportunities for Clever Leaves and Benchmark Botanics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clever and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clever Leaves Holdings and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Clever Leaves 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 Clever Leaves Holdings are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Clever Leaves i.e., Clever Leaves and Benchmark Botanics go up and down completely randomly.
Pair Corralation between Clever Leaves and Benchmark Botanics
Given the investment horizon of 90 days Clever Leaves Holdings is expected to generate 5.05 times more return on investment than Benchmark Botanics. However, Clever Leaves is 5.05 times more volatile than Benchmark Botanics. It trades about 0.12 of its potential returns per unit of risk. Benchmark Botanics is currently generating about 0.04 per unit of risk. If you would invest 1,310 in Clever Leaves Holdings on November 2, 2024 and sell it today you would lose (1,308) from holding Clever Leaves Holdings or give up 99.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Clever Leaves Holdings vs. Benchmark Botanics
Performance |
| Timeline |
| Clever Leaves Holdings |
| Benchmark Botanics |
Clever Leaves and Benchmark Botanics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clever Leaves and Benchmark Botanics
The main advantage of trading using opposite Clever Leaves and Benchmark Botanics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clever Leaves position performs unexpectedly, Benchmark Botanics 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 Benchmark Botanics will offset losses from the drop in Benchmark Botanics' long position.| Clever Leaves vs. Flora Growth Corp | Clever Leaves vs. AgriFORCE Growing Systems | Clever Leaves vs. Greenlane Holdings |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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