Correlation Between Green Cures and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Green Cures and Maple Leaf 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 Maple Leaf 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 Maple Leaf Green, you can compare the effects of market volatilities on Green Cures and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Maple Leaf.
Diversification Opportunities for Green Cures and Maple Leaf
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Maple is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Maple Leaf Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Green 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Green has no effect on the direction of Green Cures i.e., Green Cures and Maple Leaf go up and down completely randomly.
Pair Corralation between Green Cures and Maple Leaf
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 2.11 times more return on investment than Maple Leaf. However, Green Cures is 2.11 times more volatile than Maple Leaf Green. It trades about 0.15 of its potential returns per unit of risk. Maple Leaf Green is currently generating about 0.07 per unit of risk. If you would invest 0.08 in Green Cures Botanical on August 26, 2024 and sell it today you would lose (0.07) from holding Green Cures Botanical or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Maple Leaf Green
Performance |
| Timeline |
| Green Cures Botanical |
| Maple Leaf Green |
Green Cures and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Maple Leaf
The main advantage of trading using opposite Green Cures and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest Corp | Green Cures vs. Speakeasy Cannabis Club | Green Cures vs. Benchmark Botanics |
| Maple Leaf vs. Greater Cannabis | Maple Leaf vs. Global Hemp Group | Maple Leaf vs. Cannabis Suisse Corp | Maple Leaf vs. Mc Endvrs |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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