Correlation Between Avicanna and Pure Harvest
Can any of the company-specific risk be diversified away by investing in both Avicanna and Pure Harvest 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 Avicanna and Pure Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avicanna and Pure Harvest Cannabis, you can compare the effects of market volatilities on Avicanna and Pure Harvest 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 Avicanna with a short position of Pure Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avicanna and Pure Harvest.
Diversification Opportunities for Avicanna and Pure Harvest
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avicanna and Pure is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Avicanna and Pure Harvest Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Harvest Cannabis and Avicanna 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 Avicanna are associated (or correlated) with Pure Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Harvest Cannabis has no effect on the direction of Avicanna i.e., Avicanna and Pure Harvest go up and down completely randomly.
Pair Corralation between Avicanna and Pure Harvest
Assuming the 90 days horizon Avicanna is expected to generate 10.7 times less return on investment than Pure Harvest. But when comparing it to its historical volatility, Avicanna is 4.39 times less risky than Pure Harvest. It trades about 0.04 of its potential returns per unit of risk. Pure Harvest Cannabis is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Pure Harvest Cannabis on August 31, 2024 and sell it today you would lose (0.62) from holding Pure Harvest Cannabis or give up 77.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avicanna vs. Pure Harvest Cannabis
Performance |
| Timeline |
| Avicanna |
| Pure Harvest Cannabis |
Avicanna and Pure Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avicanna and Pure Harvest
The main advantage of trading using opposite Avicanna and Pure Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avicanna position performs unexpectedly, Pure Harvest 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 Pure Harvest will offset losses from the drop in Pure Harvest's long position.| Avicanna vs. Pharmacielo | Avicanna vs. Khiron Life Sciences | Avicanna vs. Flower One Holdings | Avicanna vs. Cansortium |
| Pure Harvest vs. Holloman Energy Corp | Pure Harvest vs. cbdMD Inc | Pure Harvest vs. Evolus Inc | Pure Harvest vs. CV Sciences |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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