Correlation Between Cannabis Global and Slang Worldwide
Can any of the company-specific risk be diversified away by investing in both Cannabis Global and Slang Worldwide 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 Slang Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannabis Global and Slang Worldwide, you can compare the effects of market volatilities on Cannabis Global and Slang Worldwide 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 Slang Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannabis Global and Slang Worldwide.
Diversification Opportunities for Cannabis Global and Slang Worldwide
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cannabis and Slang is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Global and Slang Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slang Worldwide 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 Slang Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slang Worldwide has no effect on the direction of Cannabis Global i.e., Cannabis Global and Slang Worldwide go up and down completely randomly.
Pair Corralation between Cannabis Global and Slang Worldwide
Given the investment horizon of 90 days Cannabis Global is expected to generate 5.46 times more return on investment than Slang Worldwide. However, Cannabis Global is 5.46 times more volatile than Slang Worldwide. It trades about 0.29 of its potential returns per unit of risk. Slang Worldwide is currently generating about 0.13 per unit of risk. If you would invest 0.01 in Cannabis Global on September 1, 2024 and sell it today you would earn a total of 0.01 from holding Cannabis Global or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannabis Global vs. Slang Worldwide
Performance |
| Timeline |
| Cannabis Global |
| Slang Worldwide |
Cannabis Global and Slang Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannabis Global and Slang Worldwide
The main advantage of trading using opposite Cannabis Global and Slang Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannabis Global position performs unexpectedly, Slang Worldwide 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 Slang Worldwide will offset losses from the drop in Slang Worldwide's long position.| Cannabis Global vs. Holloman Energy Corp | Cannabis Global vs. cbdMD Inc | Cannabis Global vs. Evolus Inc | Cannabis Global vs. CV Sciences |
| Slang Worldwide vs. Holloman Energy Corp | Slang Worldwide vs. cbdMD Inc | Slang Worldwide vs. Evolus Inc | Slang Worldwide vs. CV Sciences |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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