Correlation Between Broadleaf and Chicago Atlantic

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

By analyzing existing cross correlation between Broadleaf Co and Chicago Atlantic BDC,, you can compare the effects of market volatilities on Broadleaf and Chicago Atlantic 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 Broadleaf with a short position of Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadleaf and Chicago Atlantic.

Diversification Opportunities for Broadleaf and Chicago Atlantic

0.01

Correlation Coefficient

Broadleaf  Chicago Atlantic

Significant diversification

The 3 months correlation between Broadleaf and Chicago is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Broadleaf Co and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, and Broadleaf 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 Broadleaf Co are associated (or correlated) with Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of Broadleaf i.e., Broadleaf and Chicago Atlantic go up and down completely randomly.

Pair Corralation between Broadleaf and Chicago Atlantic

Assuming the 90 days horizon Broadleaf Co is expected to generate 0.02 times more return on investment than Chicago Atlantic. However, Broadleaf Co is 54.28 times less risky than Chicago Atlantic. It trades about 0.22 of its potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about -0.04 per unit of risk. If you would invest  507.00  in Broadleaf Co on October 9, 2024 and sell it today you would earn a total of  1.00  from holding Broadleaf Co or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Broadleaf Co  vs.  Chicago Atlantic BDC,

Broadleaf

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadleaf Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Broadleaf is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Chicago Atlantic BDC,

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Chicago Atlantic BDC, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Broadleaf and Chicago Atlantic

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

The idea behind Broadleaf Co and Chicago Atlantic BDC, 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.