Correlation Between Alumina Limited and Integrated Cannabis
Can any of the company-specific risk be diversified away by investing in both Alumina Limited and Integrated Cannabis 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 Alumina Limited and Integrated Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumina Limited PK and Integrated Cannabis Solutions, you can compare the effects of market volatilities on Alumina Limited and Integrated Cannabis 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 Alumina Limited with a short position of Integrated Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumina Limited and Integrated Cannabis.
Diversification Opportunities for Alumina Limited and Integrated Cannabis
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alumina and Integrated is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alumina Limited PK and Integrated Cannabis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Cannabis and Alumina Limited 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 Alumina Limited PK are associated (or correlated) with Integrated Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Cannabis has no effect on the direction of Alumina Limited i.e., Alumina Limited and Integrated Cannabis go up and down completely randomly.
Pair Corralation between Alumina Limited and Integrated Cannabis
Assuming the 90 days horizon Alumina Limited PK is expected to under-perform the Integrated Cannabis. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alumina Limited PK is 5.31 times less risky than Integrated Cannabis. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Integrated Cannabis Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.15 in Integrated Cannabis Solutions on August 29, 2024 and sell it today you would earn a total of 0.19 from holding Integrated Cannabis Solutions or generate 126.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.47% |
| Values | Daily Returns |
Alumina Limited PK vs. Integrated Cannabis Solutions
Performance |
| Timeline |
| Alumina Limited PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Integrated Cannabis |
Alumina Limited and Integrated Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumina Limited and Integrated Cannabis
The main advantage of trading using opposite Alumina Limited and Integrated Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumina Limited position performs unexpectedly, Integrated Cannabis 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 Integrated Cannabis will offset losses from the drop in Integrated Cannabis' long position.| Alumina Limited vs. Anhui Conch Cement | Alumina Limited vs. Asahi Kaisei Corp | Alumina Limited vs. Covestro ADR |
| Integrated Cannabis vs. Speakeasy Cannabis Club | Integrated Cannabis vs. City View Green | Integrated Cannabis vs. Benchmark Botanics | Integrated Cannabis vs. Ravenquest Biomed |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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