Correlation Between Aleafia Health and Green Growth

Can any of the company-specific risk be diversified away by investing in both Aleafia Health and Green Growth 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 Aleafia Health and Green Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aleafia Health and Green Growth Brands, you can compare the effects of market volatilities on Aleafia Health and Green Growth 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 Aleafia Health with a short position of Green Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aleafia Health and Green Growth.

Diversification Opportunities for Aleafia Health and Green Growth

0.0

Correlation Coefficient

Aleafia Health  Green Growth

Pay attention - limited upside

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

Pair Corralation between Aleafia Health and Green Growth

If you would invest  0.00  in Green Growth Brands on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Green Growth Brands or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

Aleafia Health  vs.  Green Growth Brands

Aleafia Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

Green Growth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aleafia Health and Green Growth

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

The idea behind Aleafia Health and Green Growth Brands 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.