Correlation Between Clever Leaves and INC Research

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

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

Diversification Opportunities for Clever Leaves and INC Research

-0.07

Correlation Coefficient

Clever Leaves  INC Research

Good diversification

The 3 months correlation between Clever and INC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Clever Leaves Holdings and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings and Clever Leaves 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 Clever Leaves Holdings are associated (or correlated) with INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of Clever Leaves i.e., Clever Leaves and INC Research go up and down completely randomly.

Pair Corralation between Clever Leaves and INC Research

Given the investment horizon of 90 days Clever Leaves Holdings is expected to generate 48.11 times more return on investment than INC Research. However, Clever Leaves is 48.11 times more volatile than INC Research Holdings. It trades about 0.22 of its potential returns per unit of risk. INC Research Holdings is currently generating about -0.03 per unit of risk. If you would invest  0.03  in Clever Leaves Holdings on September 22, 2024 and sell it today you would lose (0.01) from holding Clever Leaves Holdings or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Clever Leaves Holdings  vs.  INC Research Holdings

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.

INC Research Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INC Research Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Clever Leaves and INC Research

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

The idea behind Clever Leaves Holdings and INC Research 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..