Correlation Between Leef Brands and HempAmericana
Can any of the company-specific risk be diversified away by investing in both Leef Brands and HempAmericana 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 HempAmericana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leef Brands and HempAmericana, you can compare the effects of market volatilities on Leef Brands and HempAmericana 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 HempAmericana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leef Brands and HempAmericana.
Diversification Opportunities for Leef Brands and HempAmericana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leef and HempAmericana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leef Brands and HempAmericana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HempAmericana 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 HempAmericana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HempAmericana has no effect on the direction of Leef Brands i.e., Leef Brands and HempAmericana go up and down completely randomly.
Pair Corralation between Leef Brands and HempAmericana
Assuming the 90 days horizon Leef Brands is expected to generate 4.82 times less return on investment than HempAmericana. But when comparing it to its historical volatility, Leef Brands is 3.76 times less risky than HempAmericana. It trades about 0.04 of its potential returns per unit of risk. HempAmericana is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.01 in HempAmericana on August 25, 2024 and sell it today you would earn a total of 0.00 from holding HempAmericana or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leef Brands vs. HempAmericana
Performance |
| Timeline |
| Leef Brands |
| HempAmericana |
Leef Brands and HempAmericana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leef Brands and HempAmericana
The main advantage of trading using opposite Leef Brands and HempAmericana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leef Brands position performs unexpectedly, HempAmericana 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 HempAmericana will offset losses from the drop in HempAmericana's long position.| Leef Brands vs. Hasbro Inc | Leef Brands vs. Emerson Radio | Leef Brands vs. Playtech plc | Leef Brands vs. Cumberland Pharmaceuticals |
| HempAmericana vs. Green Cures Botanical | HempAmericana vs. Galexxy Holdings | HempAmericana vs. Indoor Harvest Corp | HempAmericana vs. Speakeasy Cannabis Club |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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