Correlation Between Cann American and CordovaCann Corp
Can any of the company-specific risk be diversified away by investing in both Cann American and CordovaCann Corp 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 CordovaCann Corp 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 CordovaCann Corp, you can compare the effects of market volatilities on Cann American and CordovaCann Corp 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 CordovaCann Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and CordovaCann Corp.
Diversification Opportunities for Cann American and CordovaCann Corp
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cann and CordovaCann is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and CordovaCann Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CordovaCann 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 CordovaCann Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CordovaCann Corp has no effect on the direction of Cann American i.e., Cann American and CordovaCann Corp go up and down completely randomly.
Pair Corralation between Cann American and CordovaCann Corp
Given the investment horizon of 90 days Cann American Corp is expected to under-perform the CordovaCann Corp. In addition to that, Cann American is 1.28 times more volatile than CordovaCann Corp. It trades about -0.06 of its total potential returns per unit of risk. CordovaCann Corp is currently generating about 0.07 per unit of volatility. If you would invest 6.60 in CordovaCann Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding CordovaCann Corp or generate 0.0% 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. CordovaCann Corp
Performance |
| Timeline |
| Cann American Corp |
| CordovaCann Corp |
Cann American and CordovaCann Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and CordovaCann Corp
The main advantage of trading using opposite Cann American and CordovaCann Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, CordovaCann Corp 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 CordovaCann Corp will offset losses from the drop in CordovaCann Corp'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 |
| CordovaCann Corp vs. Holloman Energy Corp | CordovaCann Corp vs. cbdMD Inc | CordovaCann Corp vs. Evolus Inc | CordovaCann Corp vs. CV Sciences |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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