Correlation Between Benchmark Botanics and Canntab Therapeutics
Can any of the company-specific risk be diversified away by investing in both Benchmark Botanics and Canntab Therapeutics 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 Benchmark Botanics and Canntab Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Botanics and Canntab Therapeutics Limited, you can compare the effects of market volatilities on Benchmark Botanics and Canntab Therapeutics 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 Benchmark Botanics with a short position of Canntab Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Botanics and Canntab Therapeutics.
Diversification Opportunities for Benchmark Botanics and Canntab Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Benchmark and Canntab is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and Canntab Therapeutics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canntab Therapeutics and Benchmark Botanics 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 Benchmark Botanics are associated (or correlated) with Canntab Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canntab Therapeutics has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and Canntab Therapeutics go up and down completely randomly.
Pair Corralation between Benchmark Botanics and Canntab Therapeutics
Assuming the 90 days horizon Benchmark Botanics is expected to generate 1.34 times less return on investment than Canntab Therapeutics. But when comparing it to its historical volatility, Benchmark Botanics is 1.05 times less risky than Canntab Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Canntab Therapeutics Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.03 in Canntab Therapeutics Limited on August 26, 2024 and sell it today you would lose (1.02) from holding Canntab Therapeutics Limited or give up 99.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Botanics vs. Canntab Therapeutics Limited
Performance |
| Timeline |
| Benchmark Botanics |
| Canntab Therapeutics |
Benchmark Botanics and Canntab Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Botanics and Canntab Therapeutics
The main advantage of trading using opposite Benchmark Botanics and Canntab Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Botanics position performs unexpectedly, Canntab Therapeutics 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 Canntab Therapeutics will offset losses from the drop in Canntab Therapeutics' long position.| Benchmark Botanics vs. Green Cures Botanical | Benchmark Botanics vs. Galexxy Holdings | Benchmark Botanics vs. Indoor Harvest Corp | Benchmark Botanics vs. Speakeasy Cannabis Club |
| Canntab Therapeutics vs. Green Cures Botanical | Canntab Therapeutics vs. Galexxy Holdings | Canntab Therapeutics vs. Indoor Harvest Corp | Canntab Therapeutics vs. Speakeasy Cannabis Club |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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