Correlation Between Leafly Holdings and Global Partners
Can any of the company-specific risk be diversified away by investing in both Leafly Holdings and Global Partners 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 Global Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leafly Holdings and Global Partners LP, you can compare the effects of market volatilities on Leafly Holdings and Global Partners 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 Global Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leafly Holdings and Global Partners.
Diversification Opportunities for Leafly Holdings and Global Partners
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leafly and Global is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Leafly Holdings and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP 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 Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Leafly Holdings i.e., Leafly Holdings and Global Partners go up and down completely randomly.
Pair Corralation between Leafly Holdings and Global Partners
Assuming the 90 days horizon Leafly Holdings is expected to generate 224.48 times more return on investment than Global Partners. However, Leafly Holdings is 224.48 times more volatile than Global Partners LP. It trades about 0.1 of its potential returns per unit of risk. Global Partners LP is currently generating about 0.12 per unit of risk. If you would invest 2.50 in Leafly Holdings on August 27, 2024 and sell it today you would lose (0.33) from holding Leafly Holdings or give up 13.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.54% |
| Values | Daily Returns |
Leafly Holdings vs. Global Partners LP
Performance |
| Timeline |
| Leafly Holdings |
| Global Partners LP |
Leafly Holdings and Global Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leafly Holdings and Global Partners
The main advantage of trading using opposite Leafly Holdings and Global Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leafly Holdings position performs unexpectedly, Global Partners 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 Global Partners will offset losses from the drop in Global Partners' long position.| Leafly Holdings vs. Leafly Holdings | Leafly Holdings vs. WM Technology | Leafly Holdings vs. Revelation Biosciences | Leafly Holdings vs. AEye Inc |
| Global Partners vs. GasLog Partners LP | Global Partners vs. GasLog Partners LP | Global Partners vs. Aquagold International | Global Partners vs. Morningstar Unconstrained Allocation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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