Correlation Between Love Hemp and Clever Leaves

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

By analyzing existing cross correlation between Love Hemp Group and Clever Leaves Holdings, you can compare the effects of market volatilities on Love Hemp and Clever Leaves 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 Love Hemp with a short position of Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Love Hemp and Clever Leaves.

Diversification Opportunities for Love Hemp and Clever Leaves

0.0

Correlation Coefficient

Love Hemp  Clever Leaves

Pay attention - limited upside

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

Pair Corralation between Love Hemp and Clever Leaves

If you would invest  2.50  in Clever Leaves Holdings on December 4, 2024 and sell it today you would lose (2.38) from holding Clever Leaves Holdings or give up 95.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Love Hemp Group  vs.  Clever Leaves Holdings

Love Hemp Group

Risk-Adjusted Performance

Very Weak

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

Clever Leaves Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clever Leaves Holdings are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Clever Leaves reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Love Hemp and Clever Leaves

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

The idea behind Love Hemp Group and Clever Leaves 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.