Correlation Between HLS Therapeutics and Hempfusion Wellness
Can any of the company-specific risk be diversified away by investing in both HLS Therapeutics and Hempfusion Wellness 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 HLS Therapeutics and Hempfusion Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HLS Therapeutics and Hempfusion Wellness, you can compare the effects of market volatilities on HLS Therapeutics and Hempfusion Wellness 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 HLS Therapeutics with a short position of Hempfusion Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of HLS Therapeutics and Hempfusion Wellness.
Diversification Opportunities for HLS Therapeutics and Hempfusion Wellness
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HLS and Hempfusion is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HLS Therapeutics and Hempfusion Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hempfusion Wellness and HLS Therapeutics 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 HLS Therapeutics are associated (or correlated) with Hempfusion Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hempfusion Wellness has no effect on the direction of HLS Therapeutics i.e., HLS Therapeutics and Hempfusion Wellness go up and down completely randomly.
Pair Corralation between HLS Therapeutics and Hempfusion Wellness
Assuming the 90 days horizon HLS Therapeutics is expected to under-perform the Hempfusion Wellness. But the pink sheet apears to be less risky and, when comparing its historical volatility, HLS Therapeutics is 24.19 times less risky than Hempfusion Wellness. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Hempfusion Wellness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.30 in Hempfusion Wellness on November 2, 2024 and sell it today you would lose (2.30) from holding Hempfusion Wellness or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
HLS Therapeutics vs. Hempfusion Wellness
Performance |
| Timeline |
| HLS Therapeutics |
| Hempfusion Wellness |
HLS Therapeutics and Hempfusion Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HLS Therapeutics and Hempfusion Wellness
The main advantage of trading using opposite HLS Therapeutics and Hempfusion Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HLS Therapeutics position performs unexpectedly, Hempfusion Wellness 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 Hempfusion Wellness will offset losses from the drop in Hempfusion Wellness' long position.| HLS Therapeutics vs. Aion Therapeutic | HLS Therapeutics vs. Cannara Biotech | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Canntab Therapeutics Limited |
| Hempfusion Wellness vs. City View Green | Hempfusion Wellness vs. Speakeasy Cannabis Club | Hempfusion Wellness vs. Benchmark Botanics | Hempfusion Wellness vs. Pure Harvest Cannabis |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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