Correlation Between Cann American and Link Reservations
Can any of the company-specific risk be diversified away by investing in both Cann American and Link Reservations 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 Link Reservations 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 Link Reservations, you can compare the effects of market volatilities on Cann American and Link Reservations 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 Link Reservations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Link Reservations.
Diversification Opportunities for Cann American and Link Reservations
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cann and Link is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Link Reservations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Reservations 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 Link Reservations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Reservations has no effect on the direction of Cann American i.e., Cann American and Link Reservations go up and down completely randomly.
Pair Corralation between Cann American and Link Reservations
Given the investment horizon of 90 days Cann American Corp is expected to generate 1.67 times more return on investment than Link Reservations. However, Cann American is 1.67 times more volatile than Link Reservations. It trades about -0.06 of its potential returns per unit of risk. Link Reservations is currently generating about -0.21 per unit of risk. If you would invest 0.58 in Cann American Corp on August 29, 2024 and sell it today you would lose (0.26) from holding Cann American Corp or give up 44.83% 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. Link Reservations
Performance |
| Timeline |
| Cann American Corp |
| Link Reservations |
Cann American and Link Reservations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Link Reservations
The main advantage of trading using opposite Cann American and Link Reservations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Link Reservations 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 Link Reservations will offset losses from the drop in Link Reservations' long position.| Cann American vs. Green Cures Botanical | Cann American vs. Rimrock Gold Corp | Cann American vs. Galexxy Holdings | Cann American vs. Genomma Lab Internacional |
| Link Reservations vs. Virtual Medical International | Link Reservations vs. Anything Tech Media | Link Reservations vs. Global Hemp Group | Link Reservations vs. Cannabis Suisse 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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