Correlation Between Levitee Labs and BC Bud

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

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

Diversification Opportunities for Levitee Labs and BC Bud

0.0

Correlation Coefficient

Levitee Labs  BC Bud

Pay attention - limited upside

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

Pair Corralation between Levitee Labs and BC Bud

If you would invest  5.51  in The BC Bud on December 4, 2024 and sell it today you would lose (0.01) from holding The BC Bud or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Levitee Labs  vs.  The BC Bud

Levitee Labs

Risk-Adjusted Performance

Very Weak

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

BC Bud

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The BC Bud are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, BC Bud reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Levitee Labs and BC Bud

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

The idea behind Levitee Labs and The BC Bud 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.