Correlation Between Medical Marijuana and Leef Brands
Can any of the company-specific risk be diversified away by investing in both Medical Marijuana and Leef Brands 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 Medical Marijuana and Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Marijuana I and Leef Brands, you can compare the effects of market volatilities on Medical Marijuana and Leef Brands 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 Medical Marijuana with a short position of Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Marijuana and Leef Brands.
Diversification Opportunities for Medical Marijuana and Leef Brands
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Leef is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Medical Marijuana I and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands and Medical Marijuana 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 Medical Marijuana I are associated (or correlated) with Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of Medical Marijuana i.e., Medical Marijuana and Leef Brands go up and down completely randomly.
Pair Corralation between Medical Marijuana and Leef Brands
Given the investment horizon of 90 days Medical Marijuana I is expected to under-perform the Leef Brands. But the pink sheet apears to be less risky and, when comparing its historical volatility, Medical Marijuana I is 1.71 times less risky than Leef Brands. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Leef Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Leef Brands on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Leef Brands or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Medical Marijuana I vs. Leef Brands
Performance |
| Timeline |
| Medical Marijuana |
| Leef Brands |
Medical Marijuana and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Marijuana and Leef Brands
The main advantage of trading using opposite Medical Marijuana and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Marijuana position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' long position.| Medical Marijuana vs. Brainsway | Medical Marijuana vs. Venus Concept | Medical Marijuana vs. Tactile Systems Technology | Medical Marijuana vs. Icecure Medical |
| Leef Brands vs. Legacy Education | Leef Brands vs. Apple Inc | Leef Brands vs. NVIDIA | Leef Brands vs. Microsoft |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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