Correlation Between Global Hemp and Altura Energy

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

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

Diversification Opportunities for Global Hemp and Altura Energy

-0.39

Correlation Coefficient

Global Hemp  Altura Energy

Very good diversification

The 3 months correlation between Global and Altura is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and Global Hemp 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 Global Hemp Group are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Global Hemp i.e., Global Hemp and Altura Energy go up and down completely randomly.

Pair Corralation between Global Hemp and Altura Energy

Assuming the 90 days horizon Global Hemp Group is expected to under-perform the Altura Energy. In addition to that, Global Hemp is 3.28 times more volatile than Altura Energy. It trades about -0.02 of its total potential returns per unit of risk. Altura Energy is currently generating about 0.24 per unit of volatility. If you would invest  592.00  in Altura Energy on September 4, 2024 and sell it today you would earn a total of  415.00  from holding Altura Energy or generate 70.1% return on investment over 90 days.

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

Global Hemp Group  vs.  Altura Energy

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Altura Energy

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Energy are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Altura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Hemp and Altura Energy

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

The idea behind Global Hemp Group and Altura Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.