Correlation Between Leafly Holdings and Beauty Health

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

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

Diversification Opportunities for Leafly Holdings and Beauty Health

0.0

Correlation Coefficient

Leafly Holdings  Beauty Health

Pay attention - limited upside

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

Pair Corralation between Leafly Holdings and Beauty Health

If you would invest  142.00  in Beauty Health Co on May 7, 2025 and sell it today you would earn a total of  18.00  from holding Beauty Health Co or generate 12.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Leafly Holdings  vs.  Beauty Health Co

Leafly Holdings

Risk-Adjusted Performance

Weakest

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Beauty Health

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Beauty Health Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Beauty Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leafly Holdings and Beauty Health

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

The idea behind Leafly Holdings and Beauty Health Co 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.