Correlation Between Cannabis Global and HLS Therapeutics
Can any of the company-specific risk be diversified away by investing in both Cannabis Global and HLS Therapeutics 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 HLS Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Global and HLS Therapeutics, you can compare the effects of market volatilities on Cannabis Global and HLS Therapeutics 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 HLS Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Global and HLS Therapeutics.
Diversification Opportunities for Cannabis Global and HLS Therapeutics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cannabis and HLS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Global and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics 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 HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of Cannabis Global i.e., Cannabis Global and HLS Therapeutics go up and down completely randomly.
Pair Corralation between Cannabis Global and HLS Therapeutics
Given the investment horizon of 90 days Cannabis Global is expected to generate 47.82 times more return on investment than HLS Therapeutics. However, Cannabis Global is 47.82 times more volatile than HLS Therapeutics. It trades about 0.19 of its potential returns per unit of risk. HLS Therapeutics is currently generating about -0.02 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 Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Cannabis Global vs. HLS Therapeutics
Performance |
| Timeline |
| Cannabis Global |
| HLS Therapeutics |
Cannabis Global and HLS Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Global and HLS Therapeutics
The main advantage of trading using opposite Cannabis Global and HLS Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Global position performs unexpectedly, HLS Therapeutics 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 HLS Therapeutics will offset losses from the drop in HLS Therapeutics' long position.| Cannabis Global vs. Cann American Corp | Cannabis Global vs. GelStat Corp | Cannabis Global vs. Green Cures Botanical | Cannabis Global vs. Greater Cannabis |
| HLS Therapeutics vs. Aion Therapeutic | HLS Therapeutics vs. Cannara Biotech | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Canntab Therapeutics Limited |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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