Correlation Between Stem Holdings and Levitee Labs
Can any of the company-specific risk be diversified away by investing in both Stem Holdings and Levitee Labs 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 Stem Holdings and Levitee Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stem Holdings and Levitee Labs, you can compare the effects of market volatilities on Stem Holdings and Levitee Labs 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 Stem Holdings with a short position of Levitee Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stem Holdings and Levitee Labs.
Diversification Opportunities for Stem Holdings and Levitee Labs
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Stem and Levitee is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Stem Holdings and Levitee Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levitee Labs and Stem 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 Stem Holdings are associated (or correlated) with Levitee Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levitee Labs has no effect on the direction of Stem Holdings i.e., Stem Holdings and Levitee Labs go up and down completely randomly.
Pair Corralation between Stem Holdings and Levitee Labs
If you would invest 0.27 in Levitee Labs on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Levitee Labs or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stem Holdings vs. Levitee Labs
Performance |
| Timeline |
| Stem Holdings |
| Levitee Labs |
Stem Holdings and Levitee Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stem Holdings and Levitee Labs
The main advantage of trading using opposite Stem Holdings and Levitee Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stem Holdings position performs unexpectedly, Levitee Labs 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 Levitee Labs will offset losses from the drop in Levitee Labs' long position.| Stem Holdings vs. Orchid Ventures | Stem Holdings vs. TransCanna Holdings | Stem Holdings vs. BioQuest Corp | Stem Holdings vs. Item 9 Labs |
| Levitee Labs vs. Sky Century Investment | Levitee Labs vs. Target Group | Levitee Labs vs. Aequus Pharmaceuticals | Levitee Labs vs. Filament Health Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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