Correlation Between China Infrastructure and Charlottes Web
Can any of the company-specific risk be diversified away by investing in both China Infrastructure and Charlottes Web 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 China Infrastructure and Charlottes Web into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Infrastructure Construction and Charlottes Web Holdings, you can compare the effects of market volatilities on China Infrastructure and Charlottes Web 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 China Infrastructure with a short position of Charlottes Web. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Infrastructure and Charlottes Web.
Diversification Opportunities for China Infrastructure and Charlottes Web
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Charlottes is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Infrastructure Construct and Charlottes Web Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charlottes Web Holdings and China Infrastructure 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 China Infrastructure Construction are associated (or correlated) with Charlottes Web. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charlottes Web Holdings has no effect on the direction of China Infrastructure i.e., China Infrastructure and Charlottes Web go up and down completely randomly.
Pair Corralation between China Infrastructure and Charlottes Web
Given the investment horizon of 90 days China Infrastructure Construction is expected to generate 2.53 times more return on investment than Charlottes Web. However, China Infrastructure is 2.53 times more volatile than Charlottes Web Holdings. It trades about 0.02 of its potential returns per unit of risk. Charlottes Web Holdings is currently generating about -0.03 per unit of risk. If you would invest 0.08 in China Infrastructure Construction on November 2, 2024 and sell it today you would lose (0.04) from holding China Infrastructure Construction or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
China Infrastructure Construct vs. Charlottes Web Holdings
Performance |
| Timeline |
| China Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Charlottes Web Holdings |
China Infrastructure and Charlottes Web Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Infrastructure and Charlottes Web
The main advantage of trading using opposite China Infrastructure and Charlottes Web positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Infrastructure position performs unexpectedly, Charlottes Web 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 Charlottes Web will offset losses from the drop in Charlottes Web's long position.| China Infrastructure vs. Medicine Man Technologies | China Infrastructure vs. Kona Gold Solutions | China Infrastructure vs. Green Thumb Industries | China Infrastructure vs. Cann American Corp |
| Charlottes Web vs. Verano Holdings Corp | Charlottes Web vs. Cresco Labs | Charlottes Web vs. AYR Strategies Class | Charlottes Web vs. Green Thumb Industries |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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