Correlation Between Cann American and Emergent Health
Can any of the company-specific risk be diversified away by investing in both Cann American and Emergent Health 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 Emergent Health 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 Emergent Health Corp, you can compare the effects of market volatilities on Cann American and Emergent Health 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 Emergent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Emergent Health.
Diversification Opportunities for Cann American and Emergent Health
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cann and Emergent is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Emergent Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Health Corp 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 Emergent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Health Corp has no effect on the direction of Cann American i.e., Cann American and Emergent Health go up and down completely randomly.
Pair Corralation between Cann American and Emergent Health
Given the investment horizon of 90 days Cann American Corp is expected to generate 1.08 times more return on investment than Emergent Health. However, Cann American is 1.08 times more volatile than Emergent Health Corp. It trades about 0.09 of its potential returns per unit of risk. Emergent Health Corp is currently generating about 0.08 per unit of risk. If you would invest 0.22 in Cann American Corp on August 25, 2024 and sell it today you would earn a total of 0.11 from holding Cann American Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cann American Corp vs. Emergent Health Corp
Performance |
| Timeline |
| Cann American Corp |
| Emergent Health Corp |
Cann American and Emergent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Emergent Health
The main advantage of trading using opposite Cann American and Emergent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Emergent Health 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 Emergent Health will offset losses from the drop in Emergent Health's long position.| Cann American vs. Green Cures Botanical | Cann American vs. Galexxy Holdings | Cann American vs. Indoor Harvest Corp | Cann American vs. Speakeasy Cannabis Club |
| Emergent Health vs. Galexxy Holdings | Emergent Health vs. Integrated Cannabis Solutions | Emergent Health vs. Golden Developing Solutions | Emergent Health vs. Premier Biomedical |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |