Correlation Between Love Hemp and Pure Harvest
Can any of the company-specific risk be diversified away by investing in both Love Hemp and Pure Harvest 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 Love Hemp and Pure Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Love Hemp Group and Pure Harvest Cannabis, you can compare the effects of market volatilities on Love Hemp and Pure Harvest 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 Love Hemp with a short position of Pure Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Love Hemp and Pure Harvest.
Diversification Opportunities for Love Hemp and Pure Harvest
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Love and Pure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Love Hemp Group and Pure Harvest Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Harvest Cannabis and Love Hemp 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 Love Hemp Group are associated (or correlated) with Pure Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Harvest Cannabis has no effect on the direction of Love Hemp i.e., Love Hemp and Pure Harvest go up and down completely randomly.
Pair Corralation between Love Hemp and Pure Harvest
Assuming the 90 days horizon Love Hemp is expected to generate 1.06 times less return on investment than Pure Harvest. In addition to that, Love Hemp is 1.23 times more volatile than Pure Harvest Cannabis. It trades about 0.06 of its total potential returns per unit of risk. Pure Harvest Cannabis is currently generating about 0.08 per unit of volatility. If you would invest 1.40 in Pure Harvest Cannabis on September 13, 2024 and sell it today you would lose (1.13) from holding Pure Harvest Cannabis or give up 80.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Love Hemp Group vs. Pure Harvest Cannabis
Performance |
| Timeline |
| Love Hemp Group |
| Pure Harvest Cannabis |
Love Hemp and Pure Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Love Hemp and Pure Harvest
The main advantage of trading using opposite Love Hemp and Pure Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Love Hemp position performs unexpectedly, Pure Harvest 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 Pure Harvest will offset losses from the drop in Pure Harvest's long position.| Love Hemp vs. 4Front Ventures Corp | Love Hemp vs. Khiron Life Sciences | Love Hemp vs. BellRock Brands | Love Hemp vs. Elixinol Global |
| Pure Harvest vs. 4Front Ventures Corp | Pure Harvest vs. Khiron Life Sciences | Pure Harvest vs. BellRock Brands | Pure Harvest vs. Elixinol Global |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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