Correlation Between Leafly Holdings and PetMed Express
Can any of the company-specific risk be diversified away by investing in both Leafly Holdings and PetMed Express 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 Leafly Holdings and PetMed Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leafly Holdings and PetMed Express, you can compare the effects of market volatilities on Leafly Holdings and PetMed Express 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 Leafly Holdings with a short position of PetMed Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leafly Holdings and PetMed Express.
Diversification Opportunities for Leafly Holdings and PetMed Express
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leafly and PetMed is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Leafly Holdings and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express and Leafly Holdings 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 Leafly Holdings are associated (or correlated) with PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of Leafly Holdings i.e., Leafly Holdings and PetMed Express go up and down completely randomly.
Pair Corralation between Leafly Holdings and PetMed Express
Given the investment horizon of 90 days Leafly Holdings is expected to under-perform the PetMed Express. In addition to that, Leafly Holdings is 6.51 times more volatile than PetMed Express. It trades about -0.47 of its total potential returns per unit of risk. PetMed Express is currently generating about 0.15 per unit of volatility. If you would invest 464.00 in PetMed Express on November 2, 2024 and sell it today you would earn a total of 38.00 from holding PetMed Express or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
Leafly Holdings vs. PetMed Express
Performance |
| Timeline |
| Leafly Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PetMed Express |
Leafly Holdings and PetMed Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leafly Holdings and PetMed Express
The main advantage of trading using opposite Leafly Holdings and PetMed Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leafly Holdings position performs unexpectedly, PetMed Express 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 PetMed Express will offset losses from the drop in PetMed Express' long position.| Leafly Holdings vs. Kiaro Holdings Corp | Leafly Holdings vs. Allstar Health Brands | Leafly Holdings vs. China Jo Jo Drugstores |
| PetMed Express vs. High Tide | PetMed Express vs. China Jo Jo Drugstores | PetMed Express vs. Walgreens Boots Alliance | PetMed Express vs. 111 Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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