Correlation Between YourWay Cannabis and LeanLife Health

Can any of the company-specific risk be diversified away by investing in both YourWay Cannabis and LeanLife Health 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 YourWay Cannabis and LeanLife Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for YourWay Cannabis and LeanLife Health

0.0

Correlation Coefficient

YourWay Cannabis  LeanLife Health

Pay attention - limited upside

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

Pair Corralation between YourWay Cannabis and LeanLife Health

Assuming the 90 days horizon YourWay Cannabis Brands is expected to generate 8.13 times more return on investment than LeanLife Health. However, YourWay Cannabis is 8.13 times more volatile than LeanLife Health. It trades about 0.07 of its potential returns per unit of risk. LeanLife Health is currently generating about 0.03 per unit of risk. If you would invest  3.60  in YourWay Cannabis Brands on October 11, 2024 and sell it today you would lose (3.60) from holding YourWay Cannabis Brands or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

YourWay Cannabis Brands  vs.  LeanLife Health

YourWay Cannabis Brands

Risk-Adjusted Performance

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Very Weak

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

LeanLife Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with YourWay Cannabis and LeanLife Health

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

The idea behind YourWay Cannabis Brands and LeanLife Health 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.