Correlation Between C21 Investments and StateHouse Holdings
Can any of the company-specific risk be diversified away by investing in both C21 Investments and StateHouse 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 C21 Investments and StateHouse Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C21 Investments and StateHouse Holdings, you can compare the effects of market volatilities on C21 Investments and StateHouse 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 C21 Investments with a short position of StateHouse Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of C21 Investments and StateHouse Holdings.
Diversification Opportunities for C21 Investments and StateHouse Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between C21 and StateHouse is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and StateHouse Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StateHouse Holdings and C21 Investments 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 C21 Investments are associated (or correlated) with StateHouse Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StateHouse Holdings has no effect on the direction of C21 Investments i.e., C21 Investments and StateHouse Holdings go up and down completely randomly.
Pair Corralation between C21 Investments and StateHouse Holdings
Assuming the 90 days horizon C21 Investments is expected to generate 141.57 times less return on investment than StateHouse Holdings. But when comparing it to its historical volatility, C21 Investments is 16.01 times less risky than StateHouse Holdings. It trades about 0.01 of its potential returns per unit of risk. StateHouse Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.00 in StateHouse Holdings on August 31, 2024 and sell it today you would lose (0.50) from holding StateHouse Holdings or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
C21 Investments vs. StateHouse Holdings
Performance |
| Timeline |
| C21 Investments |
| StateHouse Holdings |
C21 Investments and StateHouse Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C21 Investments and StateHouse Holdings
The main advantage of trading using opposite C21 Investments and StateHouse Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C21 Investments position performs unexpectedly, StateHouse 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 StateHouse Holdings will offset losses from the drop in StateHouse Holdings' long position.| C21 Investments vs. Holloman Energy Corp | C21 Investments vs. cbdMD Inc | C21 Investments vs. Evolus Inc | C21 Investments vs. CV Sciences |
| StateHouse Holdings vs. Benchmark Botanics | StateHouse Holdings vs. Speakeasy Cannabis Club | StateHouse Holdings vs. City View Green | StateHouse Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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