Correlation Between Leef Brands and Red Light
Can any of the company-specific risk be diversified away by investing in both Leef Brands and Red Light 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 Red Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leef Brands and Red Light Holland, you can compare the effects of market volatilities on Leef Brands and Red Light 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 Red Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leef Brands and Red Light.
Diversification Opportunities for Leef Brands and Red Light
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leef and Red is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Leef Brands and Red Light Holland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Light Holland 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 Red Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Light Holland has no effect on the direction of Leef Brands i.e., Leef Brands and Red Light go up and down completely randomly.
Pair Corralation between Leef Brands and Red Light
Assuming the 90 days horizon Leef Brands is expected to generate 4.68 times less return on investment than Red Light. In addition to that, Leef Brands is 1.49 times more volatile than Red Light Holland. It trades about 0.02 of its total potential returns per unit of risk. Red Light Holland is currently generating about 0.16 per unit of volatility. If you would invest 2.60 in Red Light Holland on August 25, 2024 and sell it today you would earn a total of 0.70 from holding Red Light Holland or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leef Brands vs. Red Light Holland
Performance |
| Timeline |
| Leef Brands |
| Red Light Holland |
Leef Brands and Red Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leef Brands and Red Light
The main advantage of trading using opposite Leef Brands and Red Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leef Brands position performs unexpectedly, Red Light 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 Red Light will offset losses from the drop in Red Light's long position.| Leef Brands vs. Hasbro Inc | Leef Brands vs. Emerson Radio | Leef Brands vs. Playtech plc | Leef Brands vs. Cumberland Pharmaceuticals |
| Red Light vs. Grey Cloak Tech | Red Light vs. Lobe Sciences | Red Light vs. Mydecine Innovations Group | Red Light vs. Charlottes Web Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |