Correlation Between City View and Pure Harvest
Can any of the company-specific risk be diversified away by investing in both City View and Pure Harvest 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 Pure Harvest 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 Pure Harvest Cannabis, you can compare the effects of market volatilities on City View and Pure Harvest 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 Pure Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of City View and Pure Harvest.
Diversification Opportunities for City View and Pure Harvest
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Pure is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and Pure Harvest Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Harvest Cannabis 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 Pure Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Harvest Cannabis has no effect on the direction of City View i.e., City View and Pure Harvest go up and down completely randomly.
Pair Corralation between City View and Pure Harvest
Assuming the 90 days horizon City View is expected to generate 1.83 times less return on investment than Pure Harvest. But when comparing it to its historical volatility, City View Green is 1.25 times less risky than Pure Harvest. It trades about 0.12 of its potential returns per unit of risk. Pure Harvest Cannabis is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Pure Harvest Cannabis on October 25, 2024 and sell it today you would earn a total of 0.20 from holding Pure Harvest Cannabis or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.16% |
| Values | Daily Returns |
City View Green vs. Pure Harvest Cannabis
Performance |
| Timeline |
| City View Green |
| Pure Harvest Cannabis |
City View and Pure Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City View and Pure Harvest
The main advantage of trading using opposite City View and Pure Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City View position performs unexpectedly, Pure Harvest 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 Pure Harvest will offset losses from the drop in Pure Harvest's long position.| City View vs. Benchmark Botanics | City View vs. Speakeasy Cannabis Club | City View vs. BC Craft Supply | City View vs. Ravenquest Biomed |
| Pure Harvest vs. Benchmark Botanics | Pure Harvest vs. Speakeasy Cannabis Club | Pure Harvest vs. City View Green | Pure Harvest vs. BC Craft Supply |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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