Correlation Between Clever Leaves and HighPeak Energy

Can any of the company-specific risk be diversified away by investing in both Clever Leaves and HighPeak Energy 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 HighPeak Energy 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 HighPeak Energy, you can compare the effects of market volatilities on Clever Leaves and HighPeak Energy 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 HighPeak Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clever Leaves and HighPeak Energy.

Diversification Opportunities for Clever Leaves and HighPeak Energy

0.1

Correlation Coefficient

Clever Leaves  HighPeak Energy

Average diversification

The 3 months correlation between Clever and HighPeak is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clever Leaves Holdings and HighPeak Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HighPeak Energy 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 HighPeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HighPeak Energy has no effect on the direction of Clever Leaves i.e., Clever Leaves and HighPeak Energy go up and down completely randomly.

Pair Corralation between Clever Leaves and HighPeak Energy

If you would invest  530.00  in HighPeak Energy on August 30, 2024 and sell it today you would lose (70.00) from holding HighPeak Energy or give up 13.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Clever Leaves Holdings  vs.  HighPeak Energy

Clever Leaves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clever Leaves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Clever Leaves is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HighPeak Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HighPeak Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, HighPeak Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clever Leaves and HighPeak Energy

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

The idea behind Clever Leaves Holdings and HighPeak Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.