Correlation Between Leef Brands and Apple
Can any of the company-specific risk be diversified away by investing in both Leef Brands and Apple 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 Leef Brands and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leef Brands and Apple Inc, you can compare the effects of market volatilities on Leef Brands and Apple 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 Leef Brands with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leef Brands and Apple.
Diversification Opportunities for Leef Brands and Apple
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leef and Apple is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Leef Brands and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Leef Brands 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 Leef Brands are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Leef Brands i.e., Leef Brands and Apple go up and down completely randomly.
Pair Corralation between Leef Brands and Apple
Assuming the 90 days horizon Leef Brands is expected to generate 9.75 times more return on investment than Apple. However, Leef Brands is 9.75 times more volatile than Apple Inc. It trades about 0.04 of its potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of risk. If you would invest 55.00 in Leef Brands on September 1, 2024 and sell it today you would lose (40.00) from holding Leef Brands or give up 72.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leef Brands vs. Apple Inc
Performance |
| Timeline |
| Leef Brands |
| Apple Inc |
Leef Brands and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leef Brands and Apple
The main advantage of trading using opposite Leef Brands and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leef Brands position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Leef Brands vs. Legacy Education | Leef Brands vs. Apple Inc | Leef Brands vs. NVIDIA | Leef Brands vs. Microsoft |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |