Correlation Between Body and Heritage Cannabis
Can any of the company-specific risk be diversified away by investing in both Body and Heritage 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 Body and Heritage Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Body and Mind and Heritage Cannabis Holdings, you can compare the effects of market volatilities on Body and Heritage 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 Body with a short position of Heritage Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Body and Heritage Cannabis.
Diversification Opportunities for Body and Heritage Cannabis
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Body and Heritage is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Body and Mind and Heritage Cannabis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Cannabis and Body 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 Body and Mind are associated (or correlated) with Heritage Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Cannabis has no effect on the direction of Body i.e., Body and Heritage Cannabis go up and down completely randomly.
Pair Corralation between Body and Heritage Cannabis
Given the investment horizon of 90 days Body is expected to generate 3.76 times less return on investment than Heritage Cannabis. But when comparing it to its historical volatility, Body and Mind is 1.57 times less risky than Heritage Cannabis. It trades about 0.02 of its potential returns per unit of risk. Heritage Cannabis Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.30 in Heritage Cannabis Holdings on September 4, 2024 and sell it today you would lose (2.16) from holding Heritage Cannabis Holdings or give up 93.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.49% |
| Values | Daily Returns |
Body and Mind vs. Heritage Cannabis Holdings
Performance |
| Timeline |
| Body and Mind |
| Heritage Cannabis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Body and Heritage Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Body and Heritage Cannabis
The main advantage of trading using opposite Body and Heritage Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Body position performs unexpectedly, Heritage 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 Heritage Cannabis will offset losses from the drop in Heritage Cannabis' long position.| Body vs. Cann American Corp | Body vs. Speakeasy Cannabis Club | Body vs. Benchmark Botanics | Body vs. Link Reservations |
| Heritage Cannabis vs. 1933 Industries | Heritage Cannabis vs. Indiva | Heritage Cannabis vs. Flower One Holdings | Heritage Cannabis vs. Body and Mind |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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