Correlation Between Cannabis Global and Kona Gold
Can any of the company-specific risk be diversified away by investing in both Cannabis Global and Kona Gold 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 Kona Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Global and Kona Gold Solutions, you can compare the effects of market volatilities on Cannabis Global and Kona Gold 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 Kona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Global and Kona Gold.
Diversification Opportunities for Cannabis Global and Kona Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cannabis and Kona is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Global and Kona Gold Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kona Gold Solutions 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 Kona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kona Gold Solutions has no effect on the direction of Cannabis Global i.e., Cannabis Global and Kona Gold go up and down completely randomly.
Pair Corralation between Cannabis Global and Kona Gold
Given the investment horizon of 90 days Cannabis Global is expected to generate 12.13 times more return on investment than Kona Gold. However, Cannabis Global is 12.13 times more volatile than Kona Gold Solutions. It trades about 0.23 of its potential returns per unit of risk. Kona Gold Solutions is currently generating about 0.05 per unit of risk. If you would invest 0.03 in Cannabis Global on August 29, 2024 and sell it today you would lose (0.03) from holding Cannabis Global or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Cannabis Global vs. Kona Gold Solutions
Performance |
| Timeline |
| Cannabis Global |
| Kona Gold Solutions |
Cannabis Global and Kona Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Global and Kona Gold
The main advantage of trading using opposite Cannabis Global and Kona Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Global position performs unexpectedly, Kona Gold 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 Kona Gold will offset losses from the drop in Kona Gold's long position.| Cannabis Global vs. Green Cures Botanical | Cannabis Global vs. Cann American Corp | Cannabis Global vs. Rimrock Gold Corp | Cannabis Global vs. Galexxy Holdings |
| Kona Gold vs. North American Cannabis | Kona Gold vs. Medical Marijuana I | Kona Gold vs. Green Cures Botanical | Kona Gold vs. Cannabis Global |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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