Correlation Between Cannabis Sativa and General Cannabis
Can any of the company-specific risk be diversified away by investing in both Cannabis Sativa and General 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 Cannabis Sativa and General Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Sativa and General Cannabis Corp, you can compare the effects of market volatilities on Cannabis Sativa and General 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 Cannabis Sativa with a short position of General Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Sativa and General Cannabis.
Diversification Opportunities for Cannabis Sativa and General Cannabis
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cannabis and General is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Sativa and General Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Cannabis Corp and Cannabis Sativa 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 Cannabis Sativa are associated (or correlated) with General Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Cannabis Corp has no effect on the direction of Cannabis Sativa i.e., Cannabis Sativa and General Cannabis go up and down completely randomly.
Pair Corralation between Cannabis Sativa and General Cannabis
Given the investment horizon of 90 days Cannabis Sativa is expected to generate 2.43 times more return on investment than General Cannabis. However, Cannabis Sativa is 2.43 times more volatile than General Cannabis Corp. It trades about 0.11 of its potential returns per unit of risk. General Cannabis Corp is currently generating about -0.07 per unit of risk. If you would invest 2.20 in Cannabis Sativa on August 29, 2024 and sell it today you would earn a total of 2.37 from holding Cannabis Sativa or generate 107.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannabis Sativa vs. General Cannabis Corp
Performance |
| Timeline |
| Cannabis Sativa |
| General Cannabis Corp |
Cannabis Sativa and General Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Sativa and General Cannabis
The main advantage of trading using opposite Cannabis Sativa and General Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Sativa position performs unexpectedly, General 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 General Cannabis will offset losses from the drop in General Cannabis' long position.| Cannabis Sativa vs. eWellness Healthcare Corp | Cannabis Sativa vs. M3 Inc | Cannabis Sativa vs. Medical Cannabis Pay | Cannabis Sativa vs. Cloud DX |
| General Cannabis vs. Verano Holdings Corp | General Cannabis vs. 4Front Ventures Corp | General Cannabis vs. Ascend Wellness Holdings | General Cannabis vs. Medicine Man Technologies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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