Correlation Between Evolus and Global Hemp

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

By analyzing existing cross correlation between Evolus Inc and Global Hemp Group, you can compare the effects of market volatilities on Evolus and Global Hemp 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 Evolus with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolus and Global Hemp.

Diversification Opportunities for Evolus and Global Hemp

0.12

Correlation Coefficient

Evolus  Global Hemp

Average diversification

The 3 months correlation between Evolus and Global is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Evolus Inc and Global Hemp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hemp Group and Evolus 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 Evolus Inc are associated (or correlated) with Global Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hemp Group has no effect on the direction of Evolus i.e., Evolus and Global Hemp go up and down completely randomly.

Pair Corralation between Evolus and Global Hemp

Given the investment horizon of 90 days Evolus is expected to generate 48.59 times less return on investment than Global Hemp. But when comparing it to its historical volatility, Evolus Inc is 14.12 times less risky than Global Hemp. It trades about 0.06 of its potential returns per unit of risk. Global Hemp Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Global Hemp Group on December 29, 2024 and sell it today you would earn a total of  0.20  from holding Global Hemp Group or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Evolus Inc  vs.  Global Hemp Group

Evolus Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolus Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Evolus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Global Hemp Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Hemp Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Global Hemp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolus and Global Hemp

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

The idea behind Evolus Inc and Global Hemp Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.