Correlation Between Global Hemp and Leef Brands
Can any of the company-specific risk be diversified away by investing in both Global Hemp 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 Global Hemp and Leef Brands 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 Leef Brands, you can compare the effects of market volatilities on Global Hemp 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 Global Hemp with a short position of Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Hemp and Leef Brands.
Diversification Opportunities for Global Hemp and Leef Brands
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Leef is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands 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 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 Global Hemp i.e., Global Hemp and Leef Brands go up and down completely randomly.
Pair Corralation between Global Hemp and Leef Brands
Assuming the 90 days horizon Global Hemp Group is expected to generate 2.55 times more return on investment than Leef Brands. However, Global Hemp is 2.55 times more volatile than Leef Brands. It trades about 0.12 of its potential returns per unit of risk. Leef Brands is currently generating about 0.05 per unit of risk. If you would invest 3.00 in Global Hemp Group on August 25, 2024 and sell it today you would lose (1.50) from holding Global Hemp Group or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Hemp Group vs. Leef Brands
Performance |
| Timeline |
| Global Hemp Group |
| Leef Brands |
Global Hemp and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Hemp and Leef Brands
The main advantage of trading using opposite Global Hemp and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Hemp 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.| Global Hemp vs. Green Cures Botanical | Global Hemp vs. Galexxy Holdings | Global Hemp vs. Indoor Harvest Corp | Global Hemp vs. Speakeasy Cannabis Club |
| Leef Brands vs. Hasbro Inc | Leef Brands vs. Emerson Radio | Leef Brands vs. Playtech plc | Leef Brands vs. Cumberland Pharmaceuticals |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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