Correlation Between Aleafia Health and Pharmagreen Biotech

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

By analyzing existing cross correlation between Aleafia Health and Pharmagreen Biotech, you can compare the effects of market volatilities on Aleafia Health and Pharmagreen Biotech 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 Pharmagreen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aleafia Health and Pharmagreen Biotech.

Diversification Opportunities for Aleafia Health and Pharmagreen Biotech

0.0

Correlation Coefficient

Aleafia Health  Pharmagreen Biotech

Pay attention - limited upside

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

Pair Corralation between Aleafia Health and Pharmagreen Biotech

If you would invest  0.16  in Pharmagreen Biotech on December 24, 2024 and sell it today you would lose (0.02) from holding Pharmagreen Biotech or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aleafia Health  vs.  Pharmagreen Biotech

Aleafia Health

Risk-Adjusted Performance

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.

Pharmagreen Biotech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pharmagreen Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental drivers, Pharmagreen Biotech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aleafia Health and Pharmagreen Biotech

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

The idea behind Aleafia Health and Pharmagreen Biotech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.