Correlation Between Cann American and Astra Veda
Can any of the company-specific risk be diversified away by investing in both Cann American and Astra Veda 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 Astra Veda 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 Astra Veda, you can compare the effects of market volatilities on Cann American and Astra Veda 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 Astra Veda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Astra Veda.
Diversification Opportunities for Cann American and Astra Veda
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cann and Astra is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Astra Veda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Veda 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 Astra Veda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Veda has no effect on the direction of Cann American i.e., Cann American and Astra Veda go up and down completely randomly.
Pair Corralation between Cann American and Astra Veda
Given the investment horizon of 90 days Cann American Corp is expected to under-perform the Astra Veda. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cann American Corp is 1.28 times less risky than Astra Veda. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Astra Veda is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Astra Veda on September 12, 2024 and sell it today you would lose (0.02) from holding Astra Veda or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cann American Corp vs. Astra Veda
Performance |
| Timeline |
| Cann American Corp |
| Astra Veda |
Cann American and Astra Veda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Astra Veda
The main advantage of trading using opposite Cann American and Astra Veda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Astra Veda 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 Astra Veda will offset losses from the drop in Astra Veda's long position.| Cann American vs. 4Front Ventures Corp | Cann American vs. Khiron Life Sciences | Cann American vs. BellRock Brands | Cann American vs. Elixinol Global |
| Astra Veda vs. Salesforce | Astra Veda vs. SAP SE ADR | Astra Veda vs. ServiceNow | Astra Veda vs. Intuit Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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