Correlation Between Blueberries Medical and Global Hemp

Can any of the company-specific risk be diversified away by investing in both Blueberries Medical 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 Blueberries Medical and Global Hemp 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 Global Hemp Group, you can compare the effects of market volatilities on Blueberries Medical 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 Blueberries Medical with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueberries Medical and Global Hemp.

Diversification Opportunities for Blueberries Medical and Global Hemp

0.42

Correlation Coefficient

Blueberries Medical  Global Hemp

Very weak diversification

The 3 months correlation between Blueberries and Global is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Blueberries Medical Corp 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 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 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 Blueberries Medical i.e., Blueberries Medical and Global Hemp go up and down completely randomly.

Pair Corralation between Blueberries Medical and Global Hemp

Assuming the 90 days horizon Blueberries Medical Corp is expected to generate 0.77 times more return on investment than Global Hemp. However, Blueberries Medical Corp is 1.29 times less risky than Global Hemp. It trades about 0.02 of its potential returns per unit of risk. Global Hemp Group is currently generating about 0.01 per unit of risk. If you would invest  1.10  in Blueberries Medical Corp on September 9, 2024 and sell it today you would lose (0.17) from holding Blueberries Medical Corp or give up 15.45% of portfolio value over 90 days.

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

Blueberries Medical Corp  vs.  Global Hemp Group

Blueberries Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blueberries Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blueberries Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Hemp Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blueberries Medical and Global Hemp

The main advantage of trading using opposite Blueberries Medical and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueberries Medical 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 Blueberries Medical Corp 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.