Correlation Between HempAmericana and Green Growth

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

By analyzing existing cross correlation between HempAmericana and Green Growth Brands, you can compare the effects of market volatilities on HempAmericana and Green Growth 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 Green Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of HempAmericana and Green Growth.

Diversification Opportunities for HempAmericana and Green Growth

0.0

Correlation Coefficient

HempAmericana  Green Growth

Pay attention - limited upside

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

Pair Corralation between HempAmericana and Green Growth

Given the investment horizon of 90 days HempAmericana is expected to generate 1.0 times more return on investment than Green Growth. However, HempAmericana is 1.0 times less risky than Green Growth. It trades about 0.05 of its potential returns per unit of risk. Green Growth Brands 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	Flat
Strength	Insignificant
Accuracy	99.65%
Values	Daily Returns

HempAmericana  vs.  Green Growth Brands

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.

Green Growth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with HempAmericana and Green Growth

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

The idea behind HempAmericana and Green Growth Brands 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.