Correlation Between Grand Havana and Branded Legacy
Can any of the company-specific risk be diversified away by investing in both Grand Havana and Branded Legacy 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 Grand Havana and Branded Legacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Havana and Branded Legacy, you can compare the effects of market volatilities on Grand Havana and Branded Legacy 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 Grand Havana with a short position of Branded Legacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Havana and Branded Legacy.
Diversification Opportunities for Grand Havana and Branded Legacy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Branded is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and Branded Legacy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Branded Legacy and Grand Havana 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 Grand Havana are associated (or correlated) with Branded Legacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Branded Legacy has no effect on the direction of Grand Havana i.e., Grand Havana and Branded Legacy go up and down completely randomly.
Pair Corralation between Grand Havana and Branded Legacy
Given the investment horizon of 90 days Grand Havana is expected to generate 2.39 times less return on investment than Branded Legacy. But when comparing it to its historical volatility, Grand Havana is 1.11 times less risky than Branded Legacy. It trades about 0.13 of its potential returns per unit of risk. Branded Legacy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Branded Legacy on November 3, 2024 and sell it today you would earn a total of 0.04 from holding Branded Legacy or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grand Havana vs. Branded Legacy
Performance |
| Timeline |
| Grand Havana |
| Branded Legacy |
Grand Havana and Branded Legacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Havana and Branded Legacy
The main advantage of trading using opposite Grand Havana and Branded Legacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Havana position performs unexpectedly, Branded Legacy 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 Branded Legacy will offset losses from the drop in Branded Legacy's long position.| Grand Havana vs. Right On Brands | Grand Havana vs. BioAdaptives | Grand Havana vs. Yuenglings Ice Cream | Grand Havana vs. Bit Origin |
| Branded Legacy vs. Premier Foods Plc | Branded Legacy vs. Torque Lifestyle Brands | Branded Legacy vs. Naturally Splendid Enterprises | Branded Legacy vs. Aryzta AG PK |
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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