Correlation Between CV Sciences and Global Hemp
Can any of the company-specific risk be diversified away by investing in both CV Sciences and Global Hemp 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 CV Sciences and Global Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CV Sciences and Global Hemp Group, you can compare the effects of market volatilities on CV Sciences and Global Hemp 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 CV Sciences with a short position of Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CV Sciences and Global Hemp.
Diversification Opportunities for CV Sciences and Global Hemp
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVSI and Global is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CV Sciences and Global Hemp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hemp Group and CV Sciences 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 CV Sciences are associated (or correlated) with Global Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hemp Group has no effect on the direction of CV Sciences i.e., CV Sciences and Global Hemp go up and down completely randomly.
Pair Corralation between CV Sciences and Global Hemp
Given the investment horizon of 90 days CV Sciences is expected to generate 0.79 times more return on investment than Global Hemp. However, CV Sciences is 1.26 times less risky than Global Hemp. It trades about -0.17 of its potential returns per unit of risk. Global Hemp Group is currently generating about -0.25 per unit of risk. If you would invest 5.00 in CV Sciences on September 3, 2024 and sell it today you would lose (1.00) from holding CV Sciences or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CV Sciences vs. Global Hemp Group
Performance |
| Timeline |
| CV Sciences |
| Global Hemp Group |
CV Sciences and Global Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CV Sciences and Global Hemp
The main advantage of trading using opposite CV Sciences and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CV Sciences position performs unexpectedly, Global Hemp 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 Global Hemp will offset losses from the drop in Global Hemp's long position.| CV Sciences vs. Marimed | CV Sciences vs. General Cannabis Corp | CV Sciences vs. American Cannabis | CV Sciences vs. Cannabis Sativa |
| Global Hemp vs. Greater Cannabis | Global Hemp vs. Cannabis Suisse Corp | Global Hemp vs. Maple Leaf Green | Global Hemp vs. Mc Endvrs |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |