Correlation Between Sohm and Global Hemp
Can any of the company-specific risk be diversified away by investing in both Sohm 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 Sohm and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sohm Inc and Global Hemp Group, you can compare the effects of market volatilities on Sohm 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 Sohm with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sohm and Global Hemp.
Diversification Opportunities for Sohm and Global Hemp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sohm and Global is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sohm Inc 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 Sohm 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 Sohm Inc 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 Sohm i.e., Sohm and Global Hemp go up and down completely randomly.
Pair Corralation between Sohm and Global Hemp
If you would invest 1.50 in Global Hemp Group on August 29, 2024 and sell it today you would lose (0.04) from holding Global Hemp Group or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Sohm Inc vs. Global Hemp Group
Performance |
| Timeline |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global Hemp Group |
Sohm and Global Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sohm and Global Hemp
The main advantage of trading using opposite Sohm and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sohm 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.The idea behind Sohm Inc and Global Hemp Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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