Correlation Between BellRock Brands and Medicine Man

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

By analyzing existing cross correlation between BellRock Brands and Medicine Man Technologies, you can compare the effects of market volatilities on BellRock Brands and Medicine Man 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 Medicine Man. Check out your portfolio center. Please also check ongoing floating volatility patterns of BellRock Brands and Medicine Man.

Diversification Opportunities for BellRock Brands and Medicine Man

0.0

Correlation Coefficient

BellRock Brands  Medicine Man

Pay attention - limited upside

The 3 months correlation between BellRock and Medicine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BellRock Brands and Medicine Man Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicine Man Technologies 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 Medicine Man. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicine Man Technologies has no effect on the direction of BellRock Brands i.e., BellRock Brands and Medicine Man go up and down completely randomly.

Pair Corralation between BellRock Brands and Medicine Man

If you would invest  42.00  in Medicine Man Technologies on September 12, 2024 and sell it today you would lose (32.00) from holding Medicine Man Technologies or give up 76.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.97%
Values	Daily Returns

BellRock Brands  vs.  Medicine Man Technologies

BellRock Brands

Risk-Adjusted Performance

0 of 100

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.

Medicine Man Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Medicine Man Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Medicine Man showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BellRock Brands and Medicine Man

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

The idea behind BellRock Brands and Medicine Man Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.