Correlation Between Global Hemp and Network International
Can any of the company-specific risk be diversified away by investing in both Global Hemp and Network International 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 Network International 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 Network International Holdings, you can compare the effects of market volatilities on Global Hemp and Network International 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 Network International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Hemp and Network International.
Diversification Opportunities for Global Hemp and Network International
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Network is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Network International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network International 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 Network International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network International has no effect on the direction of Global Hemp i.e., Global Hemp and Network International go up and down completely randomly.
Pair Corralation between Global Hemp and Network International
Assuming the 90 days horizon Global Hemp Group is expected to generate 31.5 times more return on investment than Network International. However, Global Hemp is 31.5 times more volatile than Network International Holdings. It trades about 0.12 of its potential returns per unit of risk. Network International Holdings is currently generating about 0.05 per unit of risk. If you would invest 1.00 in Global Hemp Group on August 28, 2024 and sell it today you would earn a total of 0.50 from holding Global Hemp Group or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.89% |
| Values | Daily Returns |
Global Hemp Group vs. Network International Holdings
Performance |
| Timeline |
| Global Hemp Group |
| Network International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Global Hemp and Network International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Hemp and Network International
The main advantage of trading using opposite Global Hemp and Network International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Hemp position performs unexpectedly, Network International 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 Network International will offset losses from the drop in Network International's long position.The idea behind Global Hemp Group and Network International Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Network International vs. Cerberus Cyber Sentinel | Network International vs. Gorilla Technology Group | Network International vs. Taoping | Network International vs. Crowdstrike Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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