Correlation Between Elixinol Global and Lords Company
Can any of the company-specific risk be diversified away by investing in both Elixinol Global and Lords Company 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 Elixinol Global and Lords Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elixinol Global and Lords Company Worldwide, you can compare the effects of market volatilities on Elixinol Global and Lords Company 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 Elixinol Global with a short position of Lords Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elixinol Global and Lords Company.
Diversification Opportunities for Elixinol Global and Lords Company
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elixinol and Lords is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Elixinol Global and Lords Company Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Worldwide and Elixinol 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 Elixinol Global are associated (or correlated) with Lords Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Worldwide has no effect on the direction of Elixinol Global i.e., Elixinol Global and Lords Company go up and down completely randomly.
Pair Corralation between Elixinol Global and Lords Company
Assuming the 90 days horizon Elixinol Global is expected to generate 2.8 times more return on investment than Lords Company. However, Elixinol Global is 2.8 times more volatile than Lords Company Worldwide. It trades about 0.11 of its potential returns per unit of risk. Lords Company Worldwide is currently generating about 0.05 per unit of risk. If you would invest 1.40 in Elixinol Global on September 13, 2024 and sell it today you would lose (0.90) from holding Elixinol Global or give up 64.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elixinol Global vs. Lords Company Worldwide
Performance |
| Timeline |
| Elixinol Global |
| Lords Worldwide |
Elixinol Global and Lords Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elixinol Global and Lords Company
The main advantage of trading using opposite Elixinol Global and Lords Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elixinol Global position performs unexpectedly, Lords Company 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 Lords Company will offset losses from the drop in Lords Company's long position.| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
| Lords Company vs. 4Front Ventures Corp | Lords Company vs. Khiron Life Sciences | Lords Company vs. BellRock Brands | Lords Company vs. Elixinol Global |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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