Correlation Between American Cannabis and Booz Allen
Can any of the company-specific risk be diversified away by investing in both American Cannabis and Booz Allen 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 American Cannabis and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Cannabis and Booz Allen Hamilton, you can compare the effects of market volatilities on American Cannabis and Booz Allen 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 American Cannabis with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Cannabis and Booz Allen.
Diversification Opportunities for American Cannabis and Booz Allen
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Booz is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding American Cannabis and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and American 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 American Cannabis are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of American Cannabis i.e., American Cannabis and Booz Allen go up and down completely randomly.
Pair Corralation between American Cannabis and Booz Allen
Given the investment horizon of 90 days American Cannabis is expected to generate 14.69 times more return on investment than Booz Allen. However, American Cannabis is 14.69 times more volatile than Booz Allen Hamilton. It trades about 0.05 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about 0.05 per unit of risk. If you would invest 4.10 in American Cannabis on August 25, 2024 and sell it today you would lose (4.08) from holding American Cannabis or give up 99.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Cannabis vs. Booz Allen Hamilton
Performance |
| Timeline |
| American Cannabis |
| Booz Allen Hamilton |
American Cannabis and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Cannabis and Booz Allen
The main advantage of trading using opposite American Cannabis and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Cannabis position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.| American Cannabis vs. AimRite Holdings Corp | American Cannabis vs. Sack Lunch Productions | American Cannabis vs. American Diversified Holdings | American Cannabis vs. Booz Allen Hamilton |
| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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