Correlation Between Trxade and Leafly Holdings

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

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

Diversification Opportunities for Trxade and Leafly Holdings

-0.13

Correlation Coefficient

Trxade  Leafly Holdings

Good diversification

The 3 months correlation between Trxade and Leafly is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and Trxade 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 Trxade Group 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 Trxade i.e., Trxade and Leafly Holdings go up and down completely randomly.

Pair Corralation between Trxade and Leafly Holdings

Given the investment horizon of 90 days Trxade Group is expected to under-perform the Leafly Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Trxade Group is 8.56 times less risky than Leafly Holdings. The stock trades about -0.28 of its potential returns per unit of risk. The Leafly Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2.02  in Leafly Holdings on February 14, 2024 and sell it today you would earn a total of  1.78  from holding Leafly Holdings or generate 88.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Trxade Group  vs.  Leafly Holdings

Trxade Group

Risk-Adjusted Performance

12 of 100

Good

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

Leafly Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leafly Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Leafly Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trxade and Leafly Holdings

The main advantage of trading using opposite Trxade and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trxade 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 Trxade Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..