Correlation Between Cann American and Aequus Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Cann American and Aequus Pharmaceuticals 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 Aequus Pharmaceuticals 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 Aequus Pharmaceuticals, you can compare the effects of market volatilities on Cann American and Aequus Pharmaceuticals 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 Aequus Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Aequus Pharmaceuticals.
Diversification Opportunities for Cann American and Aequus Pharmaceuticals
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cann and Aequus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Aequus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequus Pharmaceuticals 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 Aequus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequus Pharmaceuticals has no effect on the direction of Cann American i.e., Cann American and Aequus Pharmaceuticals go up and down completely randomly.
Pair Corralation between Cann American and Aequus Pharmaceuticals
Given the investment horizon of 90 days Cann American Corp is expected to generate 1.9 times more return on investment than Aequus Pharmaceuticals. However, Cann American is 1.9 times more volatile than Aequus Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Aequus Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 0.22 in Cann American Corp on October 30, 2024 and sell it today you would lose (0.02) from holding Cann American Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cann American Corp vs. Aequus Pharmaceuticals
Performance |
| Timeline |
| Cann American Corp |
| Aequus Pharmaceuticals |
Cann American and Aequus Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Aequus Pharmaceuticals
The main advantage of trading using opposite Cann American and Aequus Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Aequus Pharmaceuticals 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 Aequus Pharmaceuticals will offset losses from the drop in Aequus Pharmaceuticals' 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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |