Correlation Between Creative Edge and Hemp

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

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

Diversification Opportunities for Creative Edge and Hemp

0.0

Correlation Coefficient

Creative Edge  Hemp

Pay attention - limited upside

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

Pair Corralation between Creative Edge and Hemp

Given the investment horizon of 90 days Creative Edge Nutrit is expected to generate 0.99 times more return on investment than Hemp. However, Creative Edge Nutrit is 1.01 times less risky than Hemp. It trades about 0.13 of its potential returns per unit of risk. Hemp Inc is currently generating about 0.12 per unit of risk. If you would invest  0.00  in Creative Edge Nutrit on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Creative Edge Nutrit or generate 9.223372036854776E16% return on investment over 90 days.

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

Creative Edge Nutrit  vs.  Hemp Inc

Creative Edge Nutrit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Edge Nutrit are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Creative Edge showed solid returns over the last few months and may actually be approaching a breakup point.

Hemp Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hemp Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Hemp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creative Edge and Hemp

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

The idea behind Creative Edge Nutrit and Hemp Inc 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.