Correlation Between Cann American and Stemsation International
Can any of the company-specific risk be diversified away by investing in both Cann American and Stemsation International 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 Stemsation International 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 Stemsation International, you can compare the effects of market volatilities on Cann American and Stemsation International 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 Stemsation International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cann American and Stemsation International.
Diversification Opportunities for Cann American and Stemsation International
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cann and Stemsation is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cann American Corp and Stemsation International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stemsation International 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 Stemsation International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stemsation International has no effect on the direction of Cann American i.e., Cann American and Stemsation International go up and down completely randomly.
Pair Corralation between Cann American and Stemsation International
Given the investment horizon of 90 days Cann American Corp is expected to generate 0.97 times more return on investment than Stemsation International. However, Cann American Corp is 1.03 times less risky than Stemsation International. It trades about 0.22 of its potential returns per unit of risk. Stemsation International is currently generating about 0.15 per unit of risk. If you would invest 0.20 in Cann American Corp on November 27, 2024 and sell it today you would earn a total of 0.25 from holding Cann American Corp or generate 125.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cann American Corp vs. Stemsation International
Performance |
| Timeline |
| Cann American Corp |
| Stemsation International |
Cann American and Stemsation International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cann American and Stemsation International
The main advantage of trading using opposite Cann American and Stemsation International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cann American position performs unexpectedly, Stemsation International 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 Stemsation International will offset losses from the drop in Stemsation International'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 |
| Stemsation International vs. Now Corp | Stemsation International vs. Viaderma | Stemsation International vs. China SXT Pharmaceuticals | Stemsation International vs. Rimrock Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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