Correlation Between Brainsway and Medical Marijuana
Can any of the company-specific risk be diversified away by investing in both Brainsway and Medical Marijuana 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 Brainsway and Medical Marijuana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainsway and Medical Marijuana I, you can compare the effects of market volatilities on Brainsway and Medical Marijuana 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 Brainsway with a short position of Medical Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainsway and Medical Marijuana.
Diversification Opportunities for Brainsway and Medical Marijuana
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brainsway and Medical is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Medical Marijuana I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Marijuana and Brainsway 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 Brainsway are associated (or correlated) with Medical Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Marijuana has no effect on the direction of Brainsway i.e., Brainsway and Medical Marijuana go up and down completely randomly.
Pair Corralation between Brainsway and Medical Marijuana
Given the investment horizon of 90 days Brainsway is expected to generate 0.46 times more return on investment than Medical Marijuana. However, Brainsway is 2.17 times less risky than Medical Marijuana. It trades about 0.1 of its potential returns per unit of risk. Medical Marijuana I is currently generating about -0.02 per unit of risk. If you would invest 185.00 in Brainsway on September 3, 2024 and sell it today you would earn a total of 802.00 from holding Brainsway or generate 433.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Brainsway vs. Medical Marijuana I
Performance |
| Timeline |
| Brainsway |
| Medical Marijuana |
Brainsway and Medical Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brainsway and Medical Marijuana
The main advantage of trading using opposite Brainsway and Medical Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainsway position performs unexpectedly, Medical Marijuana 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 Medical Marijuana will offset losses from the drop in Medical Marijuana's long position.| Brainsway vs. Tandem Diabetes Care | Brainsway vs. Inspire Medical Systems | Brainsway vs. Penumbra | Brainsway vs. Insulet |
| Medical Marijuana vs. American Green | Medical Marijuana vs. North American Cannabis | Medical Marijuana vs. Marijuana | Medical Marijuana vs. Rimrock Gold Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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