Correlation Between Healthy Choice and Leafly Holdings
Can any of the company-specific risk be diversified away by investing in both Healthy Choice and Leafly 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 Healthy Choice and Leafly Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthy Choice Wellness and Leafly Holdings, you can compare the effects of market volatilities on Healthy Choice and Leafly 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 Healthy Choice with a short position of Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthy Choice and Leafly Holdings.
Diversification Opportunities for Healthy Choice and Leafly Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Healthy and Leafly is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Healthy Choice Wellness and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and Healthy Choice 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 Healthy Choice Wellness are associated (or correlated) with Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of Healthy Choice i.e., Healthy Choice and Leafly Holdings go up and down completely randomly.
Pair Corralation between Healthy Choice and Leafly Holdings
Given the investment horizon of 90 days Healthy Choice Wellness is expected to generate 1.4 times more return on investment than Leafly Holdings. However, Healthy Choice is 1.4 times more volatile than Leafly Holdings. It trades about 0.18 of its potential returns per unit of risk. Leafly Holdings is currently generating about -0.34 per unit of risk. If you would invest 82.00 in Healthy Choice Wellness on October 20, 2024 and sell it today you would earn a total of 41.00 from holding Healthy Choice Wellness or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthy Choice Wellness vs. Leafly Holdings
Performance |
| Timeline |
| Healthy Choice Wellness |
| Leafly Holdings |
Healthy Choice and Leafly Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthy Choice and Leafly Holdings
The main advantage of trading using opposite Healthy Choice and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthy Choice position performs unexpectedly, Leafly 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 Leafly Holdings will offset losses from the drop in Leafly Holdings' long position.| Healthy Choice vs. VF Corporation | Healthy Choice vs. Boot Barn Holdings | Healthy Choice vs. Artisan Partners Asset | Healthy Choice vs. PennantPark Floating Rate |
| Leafly Holdings vs. Kiaro Holdings Corp | Leafly Holdings vs. Allstar Health Brands | Leafly Holdings vs. China Jo Jo Drugstores |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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