Correlation Between Eisai and Global Hemp
Can any of the company-specific risk be diversified away by investing in both Eisai and Global Hemp 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 Eisai and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eisai Co and Global Hemp Group, you can compare the effects of market volatilities on Eisai and Global Hemp 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 Eisai with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eisai and Global Hemp.
Diversification Opportunities for Eisai and Global Hemp
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eisai and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eisai Co and Global Hemp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hemp Group and Eisai 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 Eisai Co are associated (or correlated) with Global Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hemp Group has no effect on the direction of Eisai i.e., Eisai and Global Hemp go up and down completely randomly.
Pair Corralation between Eisai and Global Hemp
Assuming the 90 days horizon Eisai Co is expected to under-perform the Global Hemp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eisai Co is 13.09 times less risky than Global Hemp. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Global Hemp Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.70 in Global Hemp Group on August 25, 2024 and sell it today you would lose (0.20) from holding Global Hemp Group or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.8% |
| Values | Daily Returns |
Eisai Co vs. Global Hemp Group
Performance |
| Timeline |
| Eisai |
| Global Hemp Group |
Eisai and Global Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eisai and Global Hemp
The main advantage of trading using opposite Eisai and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eisai position performs unexpectedly, Global Hemp 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 Global Hemp will offset losses from the drop in Global Hemp's long position.| Eisai vs. Green Cures Botanical | Eisai vs. Galexxy Holdings | Eisai vs. Indoor Harvest Corp | Eisai vs. Speakeasy Cannabis Club |
| Global Hemp vs. Green Cures Botanical | Global Hemp vs. Galexxy Holdings | Global Hemp vs. Indoor Harvest Corp | Global Hemp vs. Speakeasy Cannabis Club |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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