Correlation Between Maven Brands and Green Cures

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

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

Diversification Opportunities for Maven Brands and Green Cures

0.0

Correlation Coefficient

Maven Brands  Green Cures

Pay attention - limited upside

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

Pair Corralation between Maven Brands and Green Cures

If you would invest  0.02  in Green Cures Botanical on December 20, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Maven Brands  vs.  Green Cures Botanical

Maven Brands

Risk-Adjusted Performance

Very Weak

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

Green Cures Botanical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Cures Botanical are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Green Cures unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maven Brands and Green Cures

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

The idea behind Maven Brands and Green Cures Botanical 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.