Correlation Between Tinybeans Group and Leafbuyer Technologies

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

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

Diversification Opportunities for Tinybeans Group and Leafbuyer Technologies

0.54

Correlation Coefficient

Tinybeans Group  Leafbuyer Technologies

Very weak diversification

The 3 months correlation between Tinybeans and Leafbuyer is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited and Leafbuyer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafbuyer Technologies and Tinybeans Group 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 Tinybeans Group Limited are associated (or correlated) with Leafbuyer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafbuyer Technologies has no effect on the direction of Tinybeans Group i.e., Tinybeans Group and Leafbuyer Technologies go up and down completely randomly.

Pair Corralation between Tinybeans Group and Leafbuyer Technologies

Assuming the 90 days horizon Tinybeans Group is expected to generate 8.3 times less return on investment than Leafbuyer Technologies. But when comparing it to its historical volatility, Tinybeans Group Limited is 3.42 times less risky than Leafbuyer Technologies. It trades about 0.09 of its potential returns per unit of risk. Leafbuyer Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Leafbuyer Technologies on September 4, 2024 and sell it today you would earn a total of  1.20  from holding Leafbuyer Technologies or generate 1200.0% return on investment over 90 days.

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

Tinybeans Group Limited  vs.  Leafbuyer Technologies

Tinybeans Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tinybeans Group Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Tinybeans Group reported solid returns over the last few months and may actually be approaching a breakup point.

Leafbuyer Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Leafbuyer Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Leafbuyer Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tinybeans Group and Leafbuyer Technologies

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

The idea behind Tinybeans Group Limited and Leafbuyer 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.