Correlation Between For Earth and Clever Leaves

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

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

Diversification Opportunities for For Earth and Clever Leaves

-0.33

Correlation Coefficient

For Earth  Clever Leaves

Very good diversification

The 3 months correlation between For and Clever is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding For The Earth and Clever Leaves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clever Leaves Holdings and For Earth 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 For The Earth are associated (or correlated) with Clever Leaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clever Leaves Holdings has no effect on the direction of For Earth i.e., For Earth and Clever Leaves go up and down completely randomly.

Pair Corralation between For Earth and Clever Leaves

If you would invest  2.00  in Clever Leaves Holdings on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Clever Leaves Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

For The Earth  vs.  Clever Leaves Holdings

For The Earth

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with For Earth and Clever Leaves

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

The idea behind For The Earth and Clever Leaves 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.