Correlation Between Maple Leaf and Global Hemp
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Global Hemp 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 Maple Leaf and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Green and Global Hemp Group, you can compare the effects of market volatilities on Maple Leaf and Global Hemp 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 Maple Leaf with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Global Hemp.
Diversification Opportunities for Maple Leaf and Global Hemp
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maple and Global is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and Global Hemp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hemp Group and Maple Leaf 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 Maple Leaf Green are associated (or correlated) with Global Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hemp Group has no effect on the direction of Maple Leaf i.e., Maple Leaf and Global Hemp go up and down completely randomly.
Pair Corralation between Maple Leaf and Global Hemp
Assuming the 90 days horizon Maple Leaf Green is expected to generate 1.14 times more return on investment than Global Hemp. However, Maple Leaf is 1.14 times more volatile than Global Hemp Group. It trades about 0.1 of its potential returns per unit of risk. Global Hemp Group is currently generating about 0.08 per unit of risk. If you would invest 3.00 in Maple Leaf Green on August 25, 2024 and sell it today you would lose (0.03) from holding Maple Leaf Green or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Green vs. Global Hemp Group
Performance |
| Timeline |
| Maple Leaf Green |
| Global Hemp Group |
Maple Leaf and Global Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Global Hemp
The main advantage of trading using opposite Maple Leaf and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Global Hemp 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 Hemp will offset losses from the drop in Global Hemp's long position.| Maple Leaf vs. Rezolute | Maple Leaf vs. Tempest Therapeutics | Maple Leaf vs. Forte Biosciences | Maple Leaf vs. Dyadic International |
| Global Hemp vs. Green Cures Botanical | Global Hemp vs. Galexxy Holdings | Global Hemp vs. Indoor Harvest Corp | Global Hemp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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