Correlation Between BellRock Brands and Global Hemp

Can any of the company-specific risk be diversified away by investing in both BellRock Brands 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 BellRock Brands and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BellRock Brands and Global Hemp Group, you can compare the effects of market volatilities on BellRock Brands 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 BellRock Brands with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BellRock Brands and Global Hemp.

Diversification Opportunities for BellRock Brands and Global Hemp

0.0

Correlation Coefficient

BellRock Brands  Global Hemp

Pay attention - limited upside

The 3 months correlation between BellRock and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BellRock Brands 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 BellRock Brands 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 BellRock Brands 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 BellRock Brands i.e., BellRock Brands and Global Hemp go up and down completely randomly.

Pair Corralation between BellRock Brands and Global Hemp

Assuming the 90 days horizon BellRock Brands is expected to generate 1.29 times less return on investment than Global Hemp. In addition to that, BellRock Brands is 1.26 times more volatile than Global Hemp Group. It trades about 0.09 of its total potential returns per unit of risk. Global Hemp Group is currently generating about 0.14 per unit of volatility. If you would invest  0.30  in Global Hemp Group on September 12, 2024 and sell it today you would earn a total of  0.70  from holding Global Hemp Group or generate 233.33% return on investment over 90 days.

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

BellRock Brands  vs.  Global Hemp Group

BellRock Brands

Risk-Adjusted Performance

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Very Weak

Over the last 90 days BellRock Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BellRock Brands is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 stable basic indicators, Global Hemp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BellRock Brands and Global Hemp

The main advantage of trading using opposite BellRock Brands and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BellRock Brands 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 BellRock Brands 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.