Correlation Between Herborium and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Herborium 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 Herborium and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herborium Group and Maple Leaf Green, you can compare the effects of market volatilities on Herborium 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 Herborium with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herborium and Maple Leaf.
Diversification Opportunities for Herborium and Maple Leaf
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Herborium and Maple is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Herborium Group 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 Herborium 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 Herborium Group 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 Herborium i.e., Herborium and Maple Leaf go up and down completely randomly.
Pair Corralation between Herborium and Maple Leaf
Given the investment horizon of 90 days Herborium Group is expected to generate 2.07 times more return on investment than Maple Leaf. However, Herborium is 2.07 times more volatile than Maple Leaf Green. It trades about 0.16 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 0.01 in Herborium Group on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Herborium Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.79% |
| Values | Daily Returns |
Herborium Group vs. Maple Leaf Green
Performance |
| Timeline |
| Herborium Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Maple Leaf Green |
Herborium and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herborium and Maple Leaf
The main advantage of trading using opposite Herborium and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herborium 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.| Herborium vs. Cann American Corp | Herborium vs. GelStat Corp | Herborium vs. Green Cures Botanical | Herborium vs. Nutranomics |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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