Correlation Between International Consolidated and Leef Brands
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Companies and Leef Brands, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Leef Brands.
Diversification Opportunities for International Consolidated and Leef Brands
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Leef is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Com and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands and International Consolidated 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 International Consolidated Companies 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 International Consolidated i.e., International Consolidated and Leef Brands go up and down completely randomly.
Pair Corralation between International Consolidated and Leef Brands
Given the investment horizon of 90 days International Consolidated Companies is expected to generate 2.87 times more return on investment than Leef Brands. However, International Consolidated is 2.87 times more volatile than Leef Brands. It trades about 0.19 of its potential returns per unit of risk. Leef Brands is currently generating about -0.03 per unit of risk. If you would invest 2.43 in International Consolidated Companies on October 25, 2024 and sell it today you would earn a total of 0.67 from holding International Consolidated Companies or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
International Consolidated Com vs. Leef Brands
Performance |
| Timeline |
| International Consolidated |
| Leef Brands |
International Consolidated and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Leef Brands
The main advantage of trading using opposite International Consolidated and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Frontera Group | International Consolidated vs. All American Pet | International Consolidated vs. XCPCNL Business Services | International Consolidated vs. Aramark Holdings |
| Leef Brands vs. High Performance Beverages | Leef Brands vs. Willamette Valley Vineyards | Leef Brands vs. Globalfoundries | Leef Brands vs. Teradyne |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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