Correlation Between HempAmericana and Leef Brands
Can any of the company-specific risk be diversified away by investing in both HempAmericana and Leef Brands 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 HempAmericana and Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HempAmericana and Leef Brands, you can compare the effects of market volatilities on HempAmericana and Leef Brands 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 HempAmericana with a short position of Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of HempAmericana and Leef Brands.
Diversification Opportunities for HempAmericana and Leef Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HempAmericana and Leef is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HempAmericana and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands and HempAmericana 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 HempAmericana are associated (or correlated) with Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of HempAmericana i.e., HempAmericana and Leef Brands go up and down completely randomly.
Pair Corralation between HempAmericana and Leef Brands
Given the investment horizon of 90 days HempAmericana is expected to under-perform the Leef Brands. But the pink sheet apears to be less risky and, when comparing its historical volatility, HempAmericana is 1.86 times less risky than Leef Brands. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Leef Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Leef Brands on August 29, 2024 and sell it today you would lose (9.00) from holding Leef Brands or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
HempAmericana vs. Leef Brands
Performance |
| Timeline |
| HempAmericana |
| Leef Brands |
HempAmericana and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HempAmericana and Leef Brands
The main advantage of trading using opposite HempAmericana and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HempAmericana position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' long position.| HempAmericana vs. Real Brands | HempAmericana vs. Mc Endvrs | HempAmericana vs. One World Pharma | HempAmericana vs. Greater Cannabis |
| Leef Brands vs. Apple Inc | Leef Brands vs. Microsoft | Leef Brands vs. Alphabet Inc Class C | Leef Brands vs. Meta Platforms |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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