Correlation Between Global Hemp and Blueberries Medical

Can any of the company-specific risk be diversified away by investing in both Global Hemp and Blueberries Medical 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 Blueberries Medical 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 Blueberries Medical Corp, you can compare the effects of market volatilities on Global Hemp and Blueberries Medical 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 Blueberries Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Hemp and Blueberries Medical.

Diversification Opportunities for Global Hemp and Blueberries Medical

0.36

Correlation Coefficient

Global Hemp  Blueberries Medical

Weak diversification

The 3 months correlation between Global and Blueberries is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Blueberries Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueberries Medical Corp 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 Blueberries Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueberries Medical Corp has no effect on the direction of Global Hemp i.e., Global Hemp and Blueberries Medical go up and down completely randomly.

Pair Corralation between Global Hemp and Blueberries Medical

Assuming the 90 days horizon Global Hemp Group is expected to generate 1.52 times more return on investment than Blueberries Medical. However, Global Hemp is 1.52 times more volatile than Blueberries Medical Corp. It trades about 0.01 of its potential returns per unit of risk. Blueberries Medical Corp is currently generating about -0.09 per unit of risk. If you would invest  1.46  in Global Hemp Group on September 8, 2024 and sell it today you would lose (0.46) from holding Global Hemp Group or give up 31.51% of portfolio value over 90 days.

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

Global Hemp Group  vs.  Blueberries Medical Corp

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 unfluctuating basic indicators, Global Hemp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blueberries Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blueberries Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blueberries Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global Hemp and Blueberries Medical

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

The idea behind Global Hemp Group and Blueberries Medical Corp 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.