Correlation Between Cann American and Biome Grow
Can any of the company-specific risk be diversified away by investing in both Cann American and Biome Grow 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 Biome Grow 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 Biome Grow, you can compare the effects of market volatilities on Cann American and Biome Grow 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 Biome Grow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Biome Grow.
Diversification Opportunities for Cann American and Biome Grow
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cann and Biome is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Biome Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biome Grow 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 Biome Grow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biome Grow has no effect on the direction of Cann American i.e., Cann American and Biome Grow go up and down completely randomly.
Pair Corralation between Cann American and Biome Grow
Given the investment horizon of 90 days Cann American is expected to generate 3.38 times less return on investment than Biome Grow. But when comparing it to its historical volatility, Cann American Corp is 2.6 times less risky than Biome Grow. It trades about 0.1 of its potential returns per unit of risk. Biome Grow is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.60 in Biome Grow on September 3, 2024 and sell it today you would lose (0.22) from holding Biome Grow or give up 36.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cann American Corp vs. Biome Grow
Performance |
| Timeline |
| Cann American Corp |
| Biome Grow |
Cann American and Biome Grow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Biome Grow
The main advantage of trading using opposite Cann American and Biome Grow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Biome Grow 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 Biome Grow will offset losses from the drop in Biome Grow's long position.| Cann American vs. Green Cures Botanical | Cann American vs. Galexxy Holdings | Cann American vs. Indoor Harvest Corp | Cann American vs. Genomma Lab Internacional |
| Biome Grow vs. Green Cures Botanical | Biome Grow vs. Cann American Corp | Biome Grow vs. Galexxy Holdings | Biome Grow vs. Indoor Harvest Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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