Correlation Between Cann American and Integrated Cannabis
Can any of the company-specific risk be diversified away by investing in both Cann American and Integrated Cannabis 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 Integrated Cannabis 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 Integrated Cannabis Solutions, you can compare the effects of market volatilities on Cann American and Integrated Cannabis 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 Integrated Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Integrated Cannabis.
Diversification Opportunities for Cann American and Integrated Cannabis
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cann and Integrated is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Integrated Cannabis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Cannabis 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 Integrated Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Cannabis has no effect on the direction of Cann American i.e., Cann American and Integrated Cannabis go up and down completely randomly.
Pair Corralation between Cann American and Integrated Cannabis
Given the investment horizon of 90 days Cann American is expected to generate 1.04 times less return on investment than Integrated Cannabis. In addition to that, Cann American is 1.27 times more volatile than Integrated Cannabis Solutions. It trades about 0.09 of its total potential returns per unit of risk. Integrated Cannabis Solutions is currently generating about 0.12 per unit of volatility. If you would invest 0.08 in Integrated Cannabis Solutions on August 25, 2024 and sell it today you would earn a total of 0.29 from holding Integrated Cannabis Solutions or generate 362.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cann American Corp vs. Integrated Cannabis Solutions
Performance |
| Timeline |
| Cann American Corp |
| Integrated Cannabis |
Cann American and Integrated Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Integrated Cannabis
The main advantage of trading using opposite Cann American and Integrated Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Integrated Cannabis 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 Integrated Cannabis will offset losses from the drop in Integrated Cannabis' 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 |
| Integrated Cannabis vs. Speakeasy Cannabis Club | Integrated Cannabis vs. City View Green | Integrated Cannabis vs. Benchmark Botanics | Integrated Cannabis vs. Ravenquest Biomed |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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