Correlation Between Medavail Holdings and Leafly Holdings

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

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

Diversification Opportunities for Medavail Holdings and Leafly Holdings

0.59

Correlation Coefficient

Medavail Holdings  Leafly Holdings

Very weak diversification

The 3 months correlation between Medavail and Leafly is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Medavail Holdings and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings and Medavail Holdings 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 Medavail Holdings 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 Medavail Holdings i.e., Medavail Holdings and Leafly Holdings go up and down completely randomly.

Pair Corralation between Medavail Holdings and Leafly Holdings

Given the investment horizon of 90 days Medavail Holdings is expected to under-perform the Leafly Holdings. In addition to that, Medavail Holdings is 2.45 times more volatile than Leafly Holdings. It trades about -0.07 of its total potential returns per unit of risk. Leafly Holdings is currently generating about -0.05 per unit of volatility. If you would invest  667.00  in Leafly Holdings on February 6, 2024 and sell it today you would lose (382.00) from holding Leafly Holdings or give up 57.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.62%
Values	Daily Returns

Medavail Holdings  vs.  Leafly Holdings

Medavail Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medavail Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 fairly strong essential indicators, Leafly Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Medavail Holdings and Leafly Holdings

The main advantage of trading using opposite Medavail Holdings and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medavail Holdings 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 Medavail Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.