Correlation Between Global Hemp and Greenlane Renewables
Can any of the company-specific risk be diversified away by investing in both Global Hemp and Greenlane Renewables 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 Global Hemp and Greenlane Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Hemp Group and Greenlane Renewables, you can compare the effects of market volatilities on Global Hemp and Greenlane Renewables 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 Global Hemp with a short position of Greenlane Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Hemp and Greenlane Renewables.
Diversification Opportunities for Global Hemp and Greenlane Renewables
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Greenlane is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Greenlane Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Renewables and Global Hemp 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 Global Hemp Group are associated (or correlated) with Greenlane Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Renewables has no effect on the direction of Global Hemp i.e., Global Hemp and Greenlane Renewables go up and down completely randomly.
Pair Corralation between Global Hemp and Greenlane Renewables
Assuming the 90 days horizon Global Hemp Group is expected to generate 10.65 times more return on investment than Greenlane Renewables. However, Global Hemp is 10.65 times more volatile than Greenlane Renewables. It trades about 0.12 of its potential returns per unit of risk. Greenlane Renewables is currently generating about -0.03 per unit of risk. If you would invest 0.68 in Global Hemp Group on November 2, 2024 and sell it today you would lose (0.25) from holding Global Hemp Group or give up 36.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Global Hemp Group vs. Greenlane Renewables
Performance |
| Timeline |
| Global Hemp Group |
| Greenlane Renewables |
Global Hemp and Greenlane Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Hemp and Greenlane Renewables
The main advantage of trading using opposite Global Hemp and Greenlane Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Hemp position performs unexpectedly, Greenlane Renewables 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 Greenlane Renewables will offset losses from the drop in Greenlane Renewables' long position.| Global Hemp vs. Greater Cannabis | Global Hemp vs. Cannabis Suisse Corp | Global Hemp vs. Maple Leaf Green | Global Hemp vs. Mc Endvrs |
| Greenlane Renewables vs. Euro Tech Holdings | Greenlane Renewables vs. China Natural Resources | Greenlane Renewables vs. Fuel Tech | Greenlane Renewables vs. Vow ASA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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