Correlation Between Galexxy Holdings and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both Galexxy Holdings and Curaleaf Holdings 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 Galexxy Holdings and Curaleaf Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galexxy Holdings and Curaleaf Holdings, you can compare the effects of market volatilities on Galexxy Holdings and Curaleaf Holdings 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 Galexxy Holdings with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and Curaleaf Holdings.
Diversification Opportunities for Galexxy Holdings and Curaleaf Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Galexxy and Curaleaf is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between Galexxy Holdings and Curaleaf Holdings
Given the investment horizon of 90 days Galexxy Holdings is expected to under-perform the Curaleaf Holdings. In addition to that, Galexxy Holdings is 1.16 times more volatile than Curaleaf Holdings. It trades about -0.25 of its total potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.18 per unit of volatility. If you would invest 323.00 in Curaleaf Holdings on August 28, 2024 and sell it today you would lose (128.00) from holding Curaleaf Holdings or give up 39.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galexxy Holdings vs. Curaleaf Holdings
Performance |
| Timeline |
| Galexxy Holdings |
| Curaleaf Holdings |
Galexxy Holdings and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galexxy Holdings and Curaleaf Holdings
The main advantage of trading using opposite Galexxy Holdings and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings position performs unexpectedly, Curaleaf Holdings 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' long position.The idea behind Galexxy Holdings and Curaleaf 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.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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