Correlation Between Blueberries Medical and Clever Leaves

Can any of the company-specific risk be diversified away by investing in both Blueberries Medical and Clever Leaves 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 Blueberries Medical and Clever Leaves into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blueberries Medical Corp and Clever Leaves Holdings, you can compare the effects of market volatilities on Blueberries Medical and Clever Leaves 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 Blueberries Medical with a short position of Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueberries Medical and Clever Leaves.

Diversification Opportunities for Blueberries Medical and Clever Leaves

0.01

Correlation Coefficient

Blueberries Medical  Clever Leaves

Significant diversification

The 3 months correlation between Blueberries and Clever is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Blueberries Medical Corp and Clever Leaves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clever Leaves Holdings and Blueberries Medical 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 Blueberries Medical Corp are associated (or correlated) with Clever Leaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clever Leaves Holdings has no effect on the direction of Blueberries Medical i.e., Blueberries Medical and Clever Leaves go up and down completely randomly.

Pair Corralation between Blueberries Medical and Clever Leaves

Assuming the 90 days horizon Blueberries Medical is expected to generate 437.21 times less return on investment than Clever Leaves. But when comparing it to its historical volatility, Blueberries Medical Corp is 23.03 times less risky than Clever Leaves. It trades about 0.01 of its potential returns per unit of risk. Clever Leaves Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Clever Leaves Holdings on September 20, 2024 and sell it today you would lose (0.03) from holding Clever Leaves Holdings or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blueberries Medical Corp  vs.  Clever Leaves Holdings

Blueberries Medical Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Blueberries Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Blueberries Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Clever Leaves Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clever Leaves Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Clever Leaves reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blueberries Medical and Clever Leaves

The main advantage of trading using opposite Blueberries Medical and Clever Leaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueberries Medical position performs unexpectedly, Clever Leaves 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 Clever Leaves will offset losses from the drop in Clever Leaves' long position.

The idea behind Blueberries Medical Corp and Clever Leaves Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.