Correlation Between Global Hemp and Zoomd Technologies

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

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

Diversification Opportunities for Global Hemp and Zoomd Technologies

-0.02

Correlation Coefficient

Global Hemp  Zoomd Technologies

Good diversification

The 3 months correlation between Global and Zoomd is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group and Zoomd Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomd Technologies and Global Hemp 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 Global Hemp Group are associated (or correlated) with Zoomd Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomd Technologies has no effect on the direction of Global Hemp i.e., Global Hemp and Zoomd Technologies go up and down completely randomly.

Pair Corralation between Global Hemp and Zoomd Technologies

Assuming the 90 days horizon Global Hemp Group is expected to generate 12.98 times more return on investment than Zoomd Technologies. However, Global Hemp is 12.98 times more volatile than Zoomd Technologies. It trades about 0.17 of its potential returns per unit of risk. Zoomd Technologies is currently generating about -0.1 per unit of risk. If you would invest  1.00  in Global Hemp Group on November 30, 2024 and sell it today you would earn a total of  0.00  from holding Global Hemp Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Global Hemp Group  vs.  Zoomd Technologies

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 12 (%) 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.

Zoomd Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoomd Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Global Hemp and Zoomd Technologies

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

The idea behind Global Hemp Group and Zoomd Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.