Correlation Between Green Cures and Herborium
Can any of the company-specific risk be diversified away by investing in both Green Cures and Herborium 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 Herborium 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 Herborium Group, you can compare the effects of market volatilities on Green Cures and Herborium 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 Herborium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Herborium.
Diversification Opportunities for Green Cures and Herborium
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Herborium is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Herborium Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herborium Group 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 Herborium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herborium Group has no effect on the direction of Green Cures i.e., Green Cures and Herborium go up and down completely randomly.
Pair Corralation between Green Cures and Herborium
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 1.15 times more return on investment than Herborium. However, Green Cures is 1.15 times more volatile than Herborium Group. It trades about 0.17 of its potential returns per unit of risk. Herborium Group is currently generating about 0.15 per unit of risk. If you would invest 0.05 in Green Cures Botanical on August 29, 2024 and sell it today you would lose (0.04) from holding Green Cures Botanical or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.49% |
| Values | Daily Returns |
Green Cures Botanical vs. Herborium Group
Performance |
| Timeline |
| Green Cures Botanical |
| Herborium Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Green Cures and Herborium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Herborium
The main advantage of trading using opposite Green Cures and Herborium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Herborium 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 Herborium will offset losses from the drop in Herborium's long position.The idea behind Green Cures Botanical and Herborium Group 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.| Herborium vs. Cann American Corp | Herborium vs. GelStat Corp | Herborium vs. Green Cures Botanical | Herborium vs. Nutranomics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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