Correlation Between Haleon Plc and Greater Cannabis
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and Greater Cannabis 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 Haleon Plc and Greater Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Greater Cannabis, you can compare the effects of market volatilities on Haleon Plc and Greater Cannabis 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 Haleon Plc with a short position of Greater Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Greater Cannabis.
Diversification Opportunities for Haleon Plc and Greater Cannabis
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haleon and Greater is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis and Haleon Plc 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 Haleon plc are associated (or correlated) with Greater Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Cannabis has no effect on the direction of Haleon Plc i.e., Haleon Plc and Greater Cannabis go up and down completely randomly.
Pair Corralation between Haleon Plc and Greater Cannabis
Considering the 90-day investment horizon Haleon Plc is expected to generate 13.21 times less return on investment than Greater Cannabis. But when comparing it to its historical volatility, Haleon plc is 12.66 times less risky than Greater Cannabis. It trades about 0.06 of its potential returns per unit of risk. Greater Cannabis is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Greater Cannabis on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Greater Cannabis or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Greater Cannabis
Performance |
| Timeline |
| Haleon plc |
| Greater Cannabis |
Haleon Plc and Greater Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Greater Cannabis
The main advantage of trading using opposite Haleon Plc and Greater Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, Greater Cannabis 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 Greater Cannabis will offset losses from the drop in Greater Cannabis' long position.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| Greater Cannabis vs. Global Hemp Group | Greater Cannabis vs. Cannabis Suisse Corp | Greater Cannabis vs. Maple Leaf Green | Greater Cannabis 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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