Correlation Between Cann American and Nexien Biopharma
Can any of the company-specific risk be diversified away by investing in both Cann American and Nexien Biopharma 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 Nexien Biopharma 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 Nexien Biopharma, you can compare the effects of market volatilities on Cann American and Nexien Biopharma 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 Nexien Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Nexien Biopharma.
Diversification Opportunities for Cann American and Nexien Biopharma
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cann and Nexien is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Nexien Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexien Biopharma 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 Nexien Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexien Biopharma has no effect on the direction of Cann American i.e., Cann American and Nexien Biopharma go up and down completely randomly.
Pair Corralation between Cann American and Nexien Biopharma
Given the investment horizon of 90 days Cann American is expected to generate 1.52 times less return on investment than Nexien Biopharma. But when comparing it to its historical volatility, Cann American Corp is 1.19 times less risky than Nexien Biopharma. It trades about 0.08 of its potential returns per unit of risk. Nexien Biopharma is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.70 in Nexien Biopharma on September 4, 2024 and sell it today you would lose (1.30) from holding Nexien Biopharma or give up 48.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Cann American Corp vs. Nexien Biopharma
Performance |
| Timeline |
| Cann American Corp |
| Nexien Biopharma |
Cann American and Nexien Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Nexien Biopharma
The main advantage of trading using opposite Cann American and Nexien Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Nexien Biopharma 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 Nexien Biopharma will offset losses from the drop in Nexien Biopharma'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 |
| Nexien Biopharma vs. Cann American Corp | Nexien Biopharma vs. Speakeasy Cannabis Club | Nexien Biopharma vs. Benchmark Botanics | Nexien Biopharma vs. Link Reservations |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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