Correlation Between City View and Procaps Group
Can any of the company-specific risk be diversified away by investing in both City View and Procaps Group 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 Procaps Group 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 Procaps Group SA, you can compare the effects of market volatilities on City View and Procaps Group 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 Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of City View and Procaps Group.
Diversification Opportunities for City View and Procaps Group
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between City and Procaps is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA 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 Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of City View i.e., City View and Procaps Group go up and down completely randomly.
Pair Corralation between City View and Procaps Group
Assuming the 90 days horizon City View Green is expected to generate 5.26 times more return on investment than Procaps Group. However, City View is 5.26 times more volatile than Procaps Group SA. It trades about 0.17 of its potential returns per unit of risk. Procaps Group SA is currently generating about -0.2 per unit of risk. If you would invest 0.35 in City View Green on November 5, 2024 and sell it today you would earn a total of 0.21 from holding City View Green or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
City View Green vs. Procaps Group SA
Performance |
| Timeline |
| City View Green |
| Procaps Group SA |
City View and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City View and Procaps Group
The main advantage of trading using opposite City View and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City View position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group'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 |
| Procaps Group vs. Phibro Animal Health | Procaps Group vs. Delta 9 Cannabis | Procaps Group vs. City View Green | Procaps Group vs. Benchmark Botanics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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