Correlation Between Cann American and Slang Worldwide
Can any of the company-specific risk be diversified away by investing in both Cann American and Slang Worldwide 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 Slang Worldwide 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 Slang Worldwide, you can compare the effects of market volatilities on Cann American and Slang Worldwide 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 Slang Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Slang Worldwide.
Diversification Opportunities for Cann American and Slang Worldwide
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cann and Slang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Slang Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slang Worldwide 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 Slang Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slang Worldwide has no effect on the direction of Cann American i.e., Cann American and Slang Worldwide go up and down completely randomly.
Pair Corralation between Cann American and Slang Worldwide
Given the investment horizon of 90 days Cann American is expected to generate 3.26 times less return on investment than Slang Worldwide. But when comparing it to its historical volatility, Cann American Corp is 1.52 times less risky than Slang Worldwide. It trades about 0.04 of its potential returns per unit of risk. Slang Worldwide is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.36 in Slang Worldwide on September 13, 2024 and sell it today you would lose (0.05) from holding Slang Worldwide or give up 13.89% 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. Slang Worldwide
Performance |
| Timeline |
| Cann American Corp |
| Slang Worldwide |
Cann American and Slang Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Slang Worldwide
The main advantage of trading using opposite Cann American and Slang Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Slang Worldwide 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 Slang Worldwide will offset losses from the drop in Slang Worldwide'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 |
| Slang Worldwide vs. Orchid Ventures | Slang Worldwide vs. TransCanna Holdings | Slang Worldwide vs. BioQuest Corp | Slang Worldwide vs. Goodness Growth Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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