Correlation Between Leef Brands and Greater Cannabis
Can any of the company-specific risk be diversified away by investing in both Leef Brands and Greater Cannabis 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 Greater Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leef Brands and Greater Cannabis, you can compare the effects of market volatilities on Leef Brands and Greater Cannabis 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 Greater Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leef Brands and Greater Cannabis.
Diversification Opportunities for Leef Brands and Greater Cannabis
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leef and Greater is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Leef Brands and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis 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 Greater Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Cannabis has no effect on the direction of Leef Brands i.e., Leef Brands and Greater Cannabis go up and down completely randomly.
Pair Corralation between Leef Brands and Greater Cannabis
Assuming the 90 days horizon Leef Brands is expected to generate 1.01 times more return on investment than Greater Cannabis. However, Leef Brands is 1.01 times more volatile than Greater Cannabis. It trades about 0.07 of its potential returns per unit of risk. Greater Cannabis is currently generating about 0.04 per unit of risk. If you would invest 11.00 in Leef Brands on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Leef Brands or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leef Brands vs. Greater Cannabis
Performance |
| Timeline |
| Leef Brands |
| Greater Cannabis |
Leef Brands and Greater Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leef Brands and Greater Cannabis
The main advantage of trading using opposite Leef Brands and Greater Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leef Brands position performs unexpectedly, Greater Cannabis 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 Greater Cannabis will offset losses from the drop in Greater Cannabis' long position.| Leef Brands vs. Hasbro Inc | Leef Brands vs. Emerson Radio | Leef Brands vs. Playtech plc | Leef Brands vs. Cumberland Pharmaceuticals |
| Greater Cannabis vs. Global Hemp Group | Greater Cannabis vs. Cannabis Suisse Corp | Greater Cannabis vs. Maple Leaf Green | Greater Cannabis vs. Mc Endvrs |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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