Correlation Between Cannabis Sativa and 22nd Century
Can any of the company-specific risk be diversified away by investing in both Cannabis Sativa and 22nd Century 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 22nd Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Sativa and 22nd Century Group, you can compare the effects of market volatilities on Cannabis Sativa and 22nd Century 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 22nd Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Sativa and 22nd Century.
Diversification Opportunities for Cannabis Sativa and 22nd Century
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cannabis and 22nd is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Sativa and 22nd Century Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 22nd Century Group 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 22nd Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 22nd Century Group has no effect on the direction of Cannabis Sativa i.e., Cannabis Sativa and 22nd Century go up and down completely randomly.
Pair Corralation between Cannabis Sativa and 22nd Century
Given the investment horizon of 90 days Cannabis Sativa is expected to generate 1.55 times more return on investment than 22nd Century. However, Cannabis Sativa is 1.55 times more volatile than 22nd Century Group. It trades about 0.07 of its potential returns per unit of risk. 22nd Century Group is currently generating about -0.12 per unit of risk. If you would invest 5.00 in Cannabis Sativa on August 29, 2024 and sell it today you would lose (0.43) from holding Cannabis Sativa or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannabis Sativa vs. 22nd Century Group
Performance |
| Timeline |
| Cannabis Sativa |
| 22nd Century Group |
Cannabis Sativa and 22nd Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Sativa and 22nd Century
The main advantage of trading using opposite Cannabis Sativa and 22nd Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Sativa position performs unexpectedly, 22nd Century 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 22nd Century will offset losses from the drop in 22nd Century's long position.| Cannabis Sativa vs. eWellness Healthcare Corp | Cannabis Sativa vs. M3 Inc | Cannabis Sativa vs. Medical Cannabis Pay | Cannabis Sativa vs. Cloud DX |
| 22nd Century vs. Turning Point Brands | 22nd Century vs. Green Globe International | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. Kaival Brands Innovations |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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