Correlation Between Green Cures and Elixinol Global
Can any of the company-specific risk be diversified away by investing in both Green Cures and Elixinol Global 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 Green Cures and Elixinol Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cures Botanical and Elixinol Global, you can compare the effects of market volatilities on Green Cures and Elixinol Global 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 Green Cures with a short position of Elixinol Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Elixinol Global.
Diversification Opportunities for Green Cures and Elixinol Global
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Elixinol is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Elixinol Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixinol Global and Green Cures 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 Green Cures Botanical are associated (or correlated) with Elixinol Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixinol Global has no effect on the direction of Green Cures i.e., Green Cures and Elixinol Global go up and down completely randomly.
Pair Corralation between Green Cures and Elixinol Global
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 3.94 times more return on investment than Elixinol Global. However, Green Cures is 3.94 times more volatile than Elixinol Global. It trades about 0.21 of its potential returns per unit of risk. Elixinol Global is currently generating about 0.13 per unit of risk. If you would invest 0.02 in Green Cures Botanical on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Green Cures Botanical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Green Cures Botanical vs. Elixinol Global
Performance |
| Timeline |
| Green Cures Botanical |
| Elixinol Global |
Green Cures and Elixinol Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Elixinol Global
The main advantage of trading using opposite Green Cures and Elixinol Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Elixinol Global 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 Elixinol Global will offset losses from the drop in Elixinol Global's long position.The idea behind Green Cures Botanical and Elixinol Global 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.| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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