Correlation Between General Cannabis and GelStat Corp
Can any of the company-specific risk be diversified away by investing in both General Cannabis and GelStat Corp 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 General Cannabis and GelStat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Cannabis Corp and GelStat Corp, you can compare the effects of market volatilities on General Cannabis and GelStat Corp 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 General Cannabis with a short position of GelStat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Cannabis and GelStat Corp.
Diversification Opportunities for General Cannabis and GelStat Corp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between General and GelStat is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding General Cannabis Corp and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp and General Cannabis 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 General Cannabis Corp are associated (or correlated) with GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of General Cannabis i.e., General Cannabis and GelStat Corp go up and down completely randomly.
Pair Corralation between General Cannabis and GelStat Corp
Given the investment horizon of 90 days General Cannabis Corp is expected to under-perform the GelStat Corp. But the otc stock apears to be less risky and, when comparing its historical volatility, General Cannabis Corp is 1.61 times less risky than GelStat Corp. The otc stock trades about -0.11 of its potential returns per unit of risk. The GelStat Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.04 in GelStat Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding GelStat Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Cannabis Corp vs. GelStat Corp
Performance |
| Timeline |
| General Cannabis Corp |
| GelStat Corp |
General Cannabis and GelStat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Cannabis and GelStat Corp
The main advantage of trading using opposite General Cannabis and GelStat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Cannabis position performs unexpectedly, GelStat Corp 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 GelStat Corp will offset losses from the drop in GelStat Corp's long position.| General Cannabis vs. Verano Holdings Corp | General Cannabis vs. 4Front Ventures Corp | General Cannabis vs. Ascend Wellness Holdings | General Cannabis vs. Medicine Man Technologies |
| GelStat Corp vs. Brainsway | GelStat Corp vs. Venus Concept | GelStat Corp vs. Tactile Systems Technology | GelStat Corp vs. Icecure Medical |
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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