Correlation Between Clever Leaves and IAnthus Capital

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

Diversification Opportunities for Clever Leaves and IAnthus Capital

0.0

Correlation Coefficient

Clever Leaves  IAnthus Capital

Pay attention - limited upside

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

Pair Corralation between Clever Leaves and IAnthus Capital

Assuming the 90 days horizon Clever Leaves Holdings is expected to generate 1.74 times more return on investment than IAnthus Capital. However, Clever Leaves is 1.74 times more volatile than iAnthus Capital Holdings. It trades about 0.05 of its potential returns per unit of risk. iAnthus Capital Holdings is currently generating about 0.03 per unit of risk. If you would invest  4.02  in Clever Leaves Holdings on October 12, 2024 and sell it today you would lose (2.02) from holding Clever Leaves Holdings or give up 50.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	25.45%
Values	Daily Returns

Clever Leaves Holdings  vs.  iAnthus Capital Holdings

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.

iAnthus Capital Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Clever Leaves and IAnthus Capital

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

The idea behind Clever Leaves Holdings and iAnthus Capital Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.