Correlation Between KERN Old and Greenlane Holdings
Can any of the company-specific risk be diversified away by investing in both KERN Old and Greenlane 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 KERN Old and Greenlane Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KERN Old and Greenlane Holdings, you can compare the effects of market volatilities on KERN Old and Greenlane 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 KERN Old with a short position of Greenlane Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KERN Old and Greenlane Holdings.
Diversification Opportunities for KERN Old and Greenlane Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KERN and Greenlane is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KERN Old and Greenlane Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Holdings and KERN Old 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 KERN Old are associated (or correlated) with Greenlane Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Holdings has no effect on the direction of KERN Old i.e., KERN Old and Greenlane Holdings go up and down completely randomly.
Pair Corralation between KERN Old and Greenlane Holdings
Given the investment horizon of 90 days KERN Old is expected to generate 29.25 times less return on investment than Greenlane Holdings. But when comparing it to its historical volatility, KERN Old is 2.48 times less risky than Greenlane Holdings. It trades about 0.0 of its potential returns per unit of risk. Greenlane Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,850 in Greenlane Holdings on August 28, 2024 and sell it today you would lose (3,661) from holding Greenlane Holdings or give up 95.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 28.78% |
| Values | Daily Returns |
KERN Old vs. Greenlane Holdings
Performance |
| Timeline |
| KERN Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Greenlane Holdings |
KERN Old and Greenlane Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KERN Old and Greenlane Holdings
The main advantage of trading using opposite KERN Old and Greenlane Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KERN Old position performs unexpectedly, Greenlane 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 Greenlane Holdings will offset losses from the drop in Greenlane Holdings' long position.| KERN Old vs. Healthcare Triangle | KERN Old vs. Bullfrog AI Holdings, | KERN Old vs. EUDA Health Holdings | KERN Old vs. Mangoceuticals, Common Stock |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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