Correlation Between 70082LAB3 and Leafly Holdings

Can any of the company-specific risk be diversified away by investing in both 70082LAB3 and Leafly Holdings 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 70082LAB3 and Leafly Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US70082LAB36 and Leafly Holdings, you can compare the effects of market volatilities on 70082LAB3 and Leafly Holdings 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 70082LAB3 with a short position of Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 70082LAB3 and Leafly Holdings.

Diversification Opportunities for 70082LAB3 and Leafly Holdings

-0.63

Correlation Coefficient

70082LAB3  Leafly Holdings

Excellent diversification

The 3 months correlation between 70082LAB3 and Leafly is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding US70082LAB36 and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and 70082LAB3 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 US70082LAB36 are associated (or correlated) with Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of 70082LAB3 i.e., 70082LAB3 and Leafly Holdings go up and down completely randomly.

Pair Corralation between 70082LAB3 and Leafly Holdings

Assuming the 90 days trading horizon US70082LAB36 is expected to under-perform the Leafly Holdings. But the bond apears to be less risky and, when comparing its historical volatility, US70082LAB36 is 4.79 times less risky than Leafly Holdings. The bond trades about -0.04 of its potential returns per unit of risk. The Leafly Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.59  in Leafly Holdings on September 22, 2024 and sell it today you would lose (0.13) from holding Leafly Holdings or give up 5.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.19%
Values	Daily Returns

US70082LAB36  vs.  Leafly Holdings

US70082LAB36

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US70082LAB36 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 70082LAB3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Leafly Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leafly Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with 70082LAB3 and Leafly Holdings

The main advantage of trading using opposite 70082LAB3 and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 70082LAB3 position performs unexpectedly, Leafly Holdings 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 Leafly Holdings will offset losses from the drop in Leafly Holdings' long position.

The idea behind US70082LAB36 and Leafly Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.