Correlation Between General Cannabis and Sonoma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both General Cannabis and Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals, you can compare the effects of market volatilities on General Cannabis and Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Cannabis and Sonoma Pharmaceuticals.
Diversification Opportunities for General Cannabis and Sonoma Pharmaceuticals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between General and Sonoma is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding General Cannabis Corp and Sonoma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoma Pharmaceuticals has no effect on the direction of General Cannabis i.e., General Cannabis and Sonoma Pharmaceuticals go up and down completely randomly.
Pair Corralation between General Cannabis and Sonoma Pharmaceuticals
Given the investment horizon of 90 days General Cannabis Corp is expected to under-perform the Sonoma Pharmaceuticals. In addition to that, General Cannabis is 1.38 times more volatile than Sonoma Pharmaceuticals. It trades about -0.16 of its total potential returns per unit of risk. Sonoma Pharmaceuticals is currently generating about -0.01 per unit of volatility. If you would invest 300.00 in Sonoma Pharmaceuticals on August 29, 2024 and sell it today you would lose (21.00) from holding Sonoma Pharmaceuticals or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Cannabis Corp vs. Sonoma Pharmaceuticals
Performance |
| Timeline |
| General Cannabis Corp |
| Sonoma Pharmaceuticals |
General Cannabis and Sonoma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Cannabis and Sonoma Pharmaceuticals
The main advantage of trading using opposite General Cannabis and Sonoma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Cannabis position performs unexpectedly, Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals will offset losses from the drop in Sonoma Pharmaceuticals' 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 |
| Sonoma Pharmaceuticals vs. China Pharma Holdings | Sonoma Pharmaceuticals vs. Universe Pharmaceuticals | Sonoma Pharmaceuticals vs. Akanda Corp | Sonoma Pharmaceuticals vs. Petros Pharmaceuticals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |