Correlation Between Love Hemp and Maple Leaf

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

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

Diversification Opportunities for Love Hemp and Maple Leaf

0.0

Correlation Coefficient

Love Hemp  Maple Leaf

Pay attention - limited upside

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

Pair Corralation between Love Hemp and Maple Leaf

Assuming the 90 days horizon Love Hemp Group is expected to generate 1.92 times more return on investment than Maple Leaf. However, Love Hemp is 1.92 times more volatile than Maple Leaf Green. It trades about 0.06 of its potential returns per unit of risk. Maple Leaf Green is currently generating about 0.08 per unit of risk. If you would invest  0.09  in Love Hemp Group on September 19, 2024 and sell it today you would lose (0.09) from holding Love Hemp Group or give up 100.0% of portfolio value over 90 days.

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

Love Hemp Group  vs.  Maple Leaf Green

Love Hemp Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Love Hemp Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Love Hemp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Maple Leaf Green

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Green are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Maple Leaf reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Love Hemp and Maple Leaf

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

The idea behind Love Hemp Group and Maple Leaf Green 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.