Correlation Between China Infrastructure and THC Therapeutics
Can any of the company-specific risk be diversified away by investing in both China Infrastructure and THC 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 China Infrastructure and THC Therapeutics 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 THC Therapeutics, you can compare the effects of market volatilities on China Infrastructure and THC 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 China Infrastructure with a short position of THC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Infrastructure and THC Therapeutics.
Diversification Opportunities for China Infrastructure and THC Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and THC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding China Infrastructure Construct and THC Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THC Therapeutics 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 THC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THC Therapeutics has no effect on the direction of China Infrastructure i.e., China Infrastructure and THC Therapeutics go up and down completely randomly.
Pair Corralation between China Infrastructure and THC Therapeutics
If you would invest 0.04 in THC Therapeutics on August 28, 2024 and sell it today you would earn a total of 0.01 from holding THC Therapeutics or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
China Infrastructure Construct vs. THC Therapeutics
Performance |
| Timeline |
| China Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| THC Therapeutics |
China Infrastructure and THC Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Infrastructure and THC Therapeutics
The main advantage of trading using opposite China Infrastructure and THC Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Infrastructure position performs unexpectedly, THC 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 THC Therapeutics will offset losses from the drop in THC Therapeutics' 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 |
| THC Therapeutics vs. Rezolute | THC Therapeutics vs. Tempest Therapeutics | THC Therapeutics vs. Forte Biosciences | THC Therapeutics vs. Dyadic International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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