Correlation Between CannTrust Holdings and Red Light
Can any of the company-specific risk be diversified away by investing in both CannTrust Holdings and Red Light 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 CannTrust Holdings and Red Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CannTrust Holdings and Red Light Holland, you can compare the effects of market volatilities on CannTrust Holdings and Red Light 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 CannTrust Holdings with a short position of Red Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of CannTrust Holdings and Red Light.
Diversification Opportunities for CannTrust Holdings and Red Light
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CannTrust and Red is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CannTrust Holdings and Red Light Holland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Light Holland and CannTrust Holdings 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 CannTrust Holdings are associated (or correlated) with Red Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Light Holland has no effect on the direction of CannTrust Holdings i.e., CannTrust Holdings and Red Light go up and down completely randomly.
Pair Corralation between CannTrust Holdings and Red Light
If you would invest 2.60 in Red Light Holland on August 29, 2024 and sell it today you would earn a total of 0.58 from holding Red Light Holland or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
CannTrust Holdings vs. Red Light Holland
Performance |
| Timeline |
| CannTrust Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Red Light Holland |
CannTrust Holdings and Red Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CannTrust Holdings and Red Light
The main advantage of trading using opposite CannTrust Holdings and Red Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CannTrust Holdings position performs unexpectedly, Red Light 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 Red Light will offset losses from the drop in Red Light's long position.| CannTrust Holdings vs. Acreage Holdings | CannTrust Holdings vs. BZAM | CannTrust Holdings vs. Choom Holdings | CannTrust Holdings vs. Stem Holdings |
| Red Light vs. Grey Cloak Tech | Red Light vs. Lobe Sciences | Red Light vs. Mydecine Innovations Group | Red Light vs. Charlottes Web 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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