Correlation Between Speakeasy Cannabis and Global Hemp

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

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

Diversification Opportunities for Speakeasy Cannabis and Global Hemp

0.0

Correlation Coefficient

Speakeasy Cannabis  Global Hemp

Pay attention - limited upside

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

Pair Corralation between Speakeasy Cannabis and Global Hemp

Assuming the 90 days horizon Speakeasy Cannabis Club is expected to under-perform the Global Hemp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Speakeasy Cannabis Club is 9.98 times less risky than Global Hemp. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Global Hemp Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1.08  in Global Hemp Group on September 4, 2024 and sell it today you would lose (0.07) from holding Global Hemp Group or give up 6.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Speakeasy Cannabis Club  vs.  Global Hemp Group

Speakeasy Cannabis Club

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Speakeasy Cannabis Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Speakeasy Cannabis is not utilizing all of its potentials. The current 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 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.

Pair Trading with Speakeasy Cannabis and Global Hemp

The main advantage of trading using opposite Speakeasy Cannabis and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speakeasy Cannabis 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 Speakeasy Cannabis Club 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.