Correlation Between Curaleaf Holdings and China SXT

Can any of the company-specific risk be diversified away by investing in both Curaleaf Holdings and China SXT 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 Curaleaf Holdings and China SXT into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Curaleaf Holdings and China SXT

0.73

Correlation Coefficient

Curaleaf Holdings  China SXT

Poor diversification

The 3 months correlation between Curaleaf and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and China SXT Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China SXT Pharmaceuticals and Curaleaf 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 Curaleaf Holdings are associated (or correlated) with China SXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China SXT Pharmaceuticals has no effect on the direction of Curaleaf Holdings i.e., Curaleaf Holdings and China SXT go up and down completely randomly.

Pair Corralation between Curaleaf Holdings and China SXT

Assuming the 90 days horizon Curaleaf Holdings is expected to generate 1.03 times more return on investment than China SXT. However, Curaleaf Holdings is 1.03 times more volatile than China SXT Pharmaceuticals. It trades about -0.07 of its potential returns per unit of risk. China SXT Pharmaceuticals is currently generating about -0.08 per unit of risk. If you would invest  295.00  in Curaleaf Holdings on September 1, 2024 and sell it today you would lose (102.00) from holding Curaleaf Holdings or give up 34.58% of portfolio value over 90 days.

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

Curaleaf Holdings  vs.  China SXT Pharmaceuticals

Curaleaf Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curaleaf Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

China SXT Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China SXT Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Curaleaf Holdings and China SXT

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

The idea behind Curaleaf Holdings and China SXT Pharmaceuticals 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 CEOs Directory module to screen CEOs from public companies around the world.