Correlation Between Cann American and Filament Health
Can any of the company-specific risk be diversified away by investing in both Cann American and Filament 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 Filament 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 Filament Health Corp, you can compare the effects of market volatilities on Cann American and Filament 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 Filament Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Filament Health.
Diversification Opportunities for Cann American and Filament Health
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cann and Filament is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Filament Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filament 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 Filament Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filament Health Corp has no effect on the direction of Cann American i.e., Cann American and Filament Health go up and down completely randomly.
Pair Corralation between Cann American and Filament Health
Given the investment horizon of 90 days Cann American Corp is expected to under-perform the Filament Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cann American Corp is 1.73 times less risky than Filament Health. The pink sheet trades about -0.3 of its potential returns per unit of risk. The Filament Health Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.98 in Filament Health Corp on October 30, 2024 and sell it today you would lose (0.54) from holding Filament Health Corp or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Cann American Corp vs. Filament Health Corp
Performance |
| Timeline |
| Cann American Corp |
| Filament Health Corp |
Cann American and Filament Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Filament Health
The main advantage of trading using opposite Cann American and Filament Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Filament 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 Filament Health will offset losses from the drop in Filament Health'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 |
| Filament Health vs. Target Group | Filament Health vs. Aequus Pharmaceuticals | Filament Health vs. Sky Century Investment | Filament Health vs. Levitee Labs |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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