Correlation Between HempAmericana and Endexx Corp

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

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

Diversification Opportunities for HempAmericana and Endexx Corp

0.21

Correlation Coefficient

HempAmericana  Endexx Corp

Modest diversification

The 3 months correlation between HempAmericana and Endexx is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding HempAmericana and Endexx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endexx Corp and HempAmericana 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 HempAmericana are associated (or correlated) with Endexx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endexx Corp has no effect on the direction of HempAmericana i.e., HempAmericana and Endexx Corp go up and down completely randomly.

Pair Corralation between HempAmericana and Endexx Corp

Given the investment horizon of 90 days HempAmericana is expected to generate 20.3 times more return on investment than Endexx Corp. However, HempAmericana is 20.3 times more volatile than Endexx Corp. It trades about 0.2 of its potential returns per unit of risk. Endexx Corp is currently generating about -0.05 per unit of risk. If you would invest  0.01  in HempAmericana on October 8, 2024 and sell it today you would earn a total of  0.00  from holding HempAmericana or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

HempAmericana  vs.  Endexx Corp

HempAmericana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HempAmericana are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, HempAmericana reported solid returns over the last few months and may actually be approaching a breakup point.

Endexx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endexx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Endexx Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HempAmericana and Endexx Corp

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

The idea behind HempAmericana and Endexx Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.