Correlation Between City View and Molecule Holdings
Can any of the company-specific risk be diversified away by investing in both City View and Molecule Holdings 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 City View and Molecule Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City View Green and Molecule Holdings, you can compare the effects of market volatilities on City View and Molecule Holdings 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 City View with a short position of Molecule Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of City View and Molecule Holdings.
Diversification Opportunities for City View and Molecule Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between City and Molecule is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and Molecule Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecule Holdings and City View 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 City View Green are associated (or correlated) with Molecule Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecule Holdings has no effect on the direction of City View i.e., City View and Molecule Holdings go up and down completely randomly.
Pair Corralation between City View and Molecule Holdings
Assuming the 90 days horizon City View Green is expected to generate 1.63 times more return on investment than Molecule Holdings. However, City View is 1.63 times more volatile than Molecule Holdings. It trades about 0.08 of its potential returns per unit of risk. Molecule Holdings is currently generating about 0.03 per unit of risk. If you would invest 0.50 in City View Green on August 29, 2024 and sell it today you would earn a total of 0.85 from holding City View Green or generate 170.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
City View Green vs. Molecule Holdings
Performance |
| Timeline |
| City View Green |
| Molecule Holdings |
City View and Molecule Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City View and Molecule Holdings
The main advantage of trading using opposite City View and Molecule Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City View position performs unexpectedly, Molecule Holdings 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 Molecule Holdings will offset losses from the drop in Molecule Holdings' long position.| City View vs. Benchmark Botanics | City View vs. Speakeasy Cannabis Club | City View vs. BC Craft Supply | City View vs. Ravenquest Biomed |
| Molecule Holdings vs. Hypera SA | Molecule Holdings vs. YourWay Cannabis Brands | Molecule Holdings vs. Cumberland Pharmaceuticals | Molecule Holdings vs. Speakeasy Cannabis Club |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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