Correlation Between Cann American and Aion Therapeutic
Can any of the company-specific risk be diversified away by investing in both Cann American and Aion Therapeutic 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 Cann American and Aion Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cann American Corp and Aion Therapeutic, you can compare the effects of market volatilities on Cann American and Aion Therapeutic 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 Cann American with a short position of Aion Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Aion Therapeutic.
Diversification Opportunities for Cann American and Aion Therapeutic
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cann and Aion is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Aion Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aion Therapeutic and Cann American 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 Cann American Corp are associated (or correlated) with Aion Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aion Therapeutic has no effect on the direction of Cann American i.e., Cann American and Aion Therapeutic go up and down completely randomly.
Pair Corralation between Cann American and Aion Therapeutic
Given the investment horizon of 90 days Cann American Corp is expected to under-perform the Aion Therapeutic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cann American Corp is 5.31 times less risky than Aion Therapeutic. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Aion Therapeutic is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Aion Therapeutic on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Aion Therapeutic or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cann American Corp vs. Aion Therapeutic
Performance |
| Timeline |
| Cann American Corp |
| Aion Therapeutic |
Cann American and Aion Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Aion Therapeutic
The main advantage of trading using opposite Cann American and Aion Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Aion Therapeutic 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 Aion Therapeutic will offset losses from the drop in Aion Therapeutic's long position.| Cann American vs. XCPCNL Business Services | Cann American vs. Golden Developing Solutions | Cann American vs. Indo Global Exchange | Cann American vs. Cgrowth Capital |
| Aion Therapeutic vs. Cann American Corp | Aion Therapeutic vs. Speakeasy Cannabis Club | Aion Therapeutic vs. Benchmark Botanics | Aion Therapeutic vs. Link Reservations |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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