Correlation Between New Perspective and Cannabotech
Can any of the company-specific risk be diversified away by investing in both New Perspective and Cannabotech 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 New Perspective and Cannabotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Cannabotech, you can compare the effects of market volatilities on New Perspective and Cannabotech 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 New Perspective with a short position of Cannabotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Cannabotech.
Diversification Opportunities for New Perspective and Cannabotech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Cannabotech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Cannabotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabotech and New Perspective 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 New Perspective Fund are associated (or correlated) with Cannabotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabotech has no effect on the direction of New Perspective i.e., New Perspective and Cannabotech go up and down completely randomly.
Pair Corralation between New Perspective and Cannabotech
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.09 times more return on investment than Cannabotech. However, New Perspective Fund is 11.17 times less risky than Cannabotech. It trades about 0.05 of its potential returns per unit of risk. Cannabotech is currently generating about -0.14 per unit of risk. If you would invest 6,302 in New Perspective Fund on October 23, 2024 and sell it today you would earn a total of 37.00 from holding New Perspective Fund or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
New Perspective Fund vs. Cannabotech
Performance |
| Timeline |
| New Perspective |
| Cannabotech |
New Perspective and Cannabotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Cannabotech
The main advantage of trading using opposite New Perspective and Cannabotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Cannabotech 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 Cannabotech will offset losses from the drop in Cannabotech's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Cannabotech vs. Electreon Wireless | Cannabotech vs. Bezeq Israeli Telecommunication | Cannabotech vs. Gilat Telecom Global | Cannabotech vs. Amot Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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