Correlation Between Cannabis Global and Hempfusion Wellness
Can any of the company-specific risk be diversified away by investing in both Cannabis Global and Hempfusion Wellness 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 Global and Hempfusion Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Global and Hempfusion Wellness, you can compare the effects of market volatilities on Cannabis Global and Hempfusion Wellness 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 Global with a short position of Hempfusion Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Global and Hempfusion Wellness.
Diversification Opportunities for Cannabis Global and Hempfusion Wellness
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cannabis and Hempfusion is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Global and Hempfusion Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hempfusion Wellness and Cannabis Global 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 Global are associated (or correlated) with Hempfusion Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hempfusion Wellness has no effect on the direction of Cannabis Global i.e., Cannabis Global and Hempfusion Wellness go up and down completely randomly.
Pair Corralation between Cannabis Global and Hempfusion Wellness
Given the investment horizon of 90 days Cannabis Global is expected to generate 1.98 times more return on investment than Hempfusion Wellness. However, Cannabis Global is 1.98 times more volatile than Hempfusion Wellness. It trades about 0.19 of its potential returns per unit of risk. Hempfusion Wellness is currently generating about 0.09 per unit of risk. If you would invest 0.07 in Cannabis Global on November 2, 2024 and sell it today you would lose (0.06) from holding Cannabis Global or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cannabis Global vs. Hempfusion Wellness
Performance |
| Timeline |
| Cannabis Global |
| Hempfusion Wellness |
Cannabis Global and Hempfusion Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Global and Hempfusion Wellness
The main advantage of trading using opposite Cannabis Global and Hempfusion Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Global position performs unexpectedly, Hempfusion Wellness 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 Hempfusion Wellness will offset losses from the drop in Hempfusion Wellness' long position.| Cannabis Global vs. Cann American Corp | Cannabis Global vs. GelStat Corp | Cannabis Global vs. Green Cures Botanical | Cannabis Global vs. Greater Cannabis |
| Hempfusion Wellness vs. City View Green | Hempfusion Wellness vs. Speakeasy Cannabis Club | Hempfusion Wellness vs. Benchmark Botanics | Hempfusion Wellness vs. Pure Harvest Cannabis |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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