Correlation Between Babylon Holdings and Cannabis Sativa
Can any of the company-specific risk be diversified away by investing in both Babylon Holdings and Cannabis Sativa 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 Babylon Holdings and Cannabis Sativa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Babylon Holdings and Cannabis Sativa, you can compare the effects of market volatilities on Babylon Holdings and Cannabis Sativa 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 Babylon Holdings with a short position of Cannabis Sativa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Babylon Holdings and Cannabis Sativa.
Diversification Opportunities for Babylon Holdings and Cannabis Sativa
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Babylon and Cannabis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Babylon Holdings and Cannabis Sativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Sativa and Babylon 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 Babylon Holdings are associated (or correlated) with Cannabis Sativa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Sativa has no effect on the direction of Babylon Holdings i.e., Babylon Holdings and Cannabis Sativa go up and down completely randomly.
Pair Corralation between Babylon Holdings and Cannabis Sativa
If you would invest 1.19 in Cannabis Sativa on August 25, 2024 and sell it today you would earn a total of 0.03 from holding Cannabis Sativa or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Babylon Holdings vs. Cannabis Sativa
Performance |
| Timeline |
| Babylon Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cannabis Sativa |
Babylon Holdings and Cannabis Sativa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Babylon Holdings and Cannabis Sativa
The main advantage of trading using opposite Babylon Holdings and Cannabis Sativa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Babylon Holdings position performs unexpectedly, Cannabis Sativa 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 Cannabis Sativa will offset losses from the drop in Cannabis Sativa's long position.| Babylon Holdings vs. FOXO Technologies | Babylon Holdings vs. Heartbeam | Babylon Holdings vs. EUDA Health Holdings | Babylon Holdings vs. Nutex Health |
| Cannabis Sativa vs. Embotelladora Andina SA | Cannabis Sativa vs. Signet International Holdings | Cannabis Sativa vs. National Beverage Corp | Cannabis Sativa vs. PT Astra International |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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