Correlation Between Juva Life and Global Hemp
Can any of the company-specific risk be diversified away by investing in both Juva Life 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 Juva Life and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juva Life and Global Hemp Group, you can compare the effects of market volatilities on Juva Life 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 Juva Life with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juva Life and Global Hemp.
Diversification Opportunities for Juva Life and Global Hemp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Juva and Global is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Juva Life 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 Juva Life 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 Juva Life 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 Juva Life i.e., Juva Life and Global Hemp go up and down completely randomly.
Pair Corralation between Juva Life and Global Hemp
Assuming the 90 days horizon Juva Life is expected to generate 32.73 times more return on investment than Global Hemp. However, Juva Life is 32.73 times more volatile than Global Hemp Group. It trades about 0.2 of its potential returns per unit of risk. Global Hemp Group is currently generating about -0.24 per unit of risk. If you would invest 0.01 in Juva Life on September 6, 2024 and sell it today you would earn a total of 0.00 from holding Juva Life or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Juva Life vs. Global Hemp Group
Performance |
Timeline |
Juva Life |
Global Hemp Group |
Juva Life and Global Hemp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Juva Life and Global Hemp
The main advantage of trading using opposite Juva Life and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juva Life 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.Juva Life vs. City View Green | Juva Life vs. Speakeasy Cannabis Club | Juva Life vs. Benchmark Botanics | Juva Life vs. Pure Harvest Cannabis |
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Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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