Correlation Between Clever Leaves and Allied Corp

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

By analyzing existing cross correlation between Clever Leaves Holdings and Allied Corp, you can compare the effects of market volatilities on Clever Leaves and Allied Corp 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 Clever Leaves with a short position of Allied Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clever Leaves and Allied Corp.

Diversification Opportunities for Clever Leaves and Allied Corp

0.3

Correlation Coefficient

Clever Leaves  Allied Corp

Weak diversification

The 3 months correlation between Clever and Allied is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clever Leaves Holdings and Allied Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Corp and Clever Leaves 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 Clever Leaves Holdings are associated (or correlated) with Allied Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Corp has no effect on the direction of Clever Leaves i.e., Clever Leaves and Allied Corp go up and down completely randomly.

Pair Corralation between Clever Leaves and Allied Corp

Given the investment horizon of 90 days Clever Leaves Holdings is expected to generate 15.33 times more return on investment than Allied Corp. However, Clever Leaves is 15.33 times more volatile than Allied Corp. It trades about 0.32 of its potential returns per unit of risk. Allied Corp is currently generating about 0.09 per unit of risk. If you would invest  0.01  in Clever Leaves Holdings on December 4, 2024 and sell it today you would earn a total of  0.11  from holding Clever Leaves Holdings or generate 1100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Clever Leaves Holdings  vs.  Allied Corp

Clever Leaves Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clever Leaves Holdings are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Clever Leaves reported solid returns over the last few months and may actually be approaching a breakup point.

Allied Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allied Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Allied Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clever Leaves and Allied Corp

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

The idea behind Clever Leaves Holdings and Allied Corp 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 CEOs Directory module to screen CEOs from public companies around the world.