Correlation Between Delta 9 and BC Craft
Can any of the company-specific risk be diversified away by investing in both Delta 9 and BC Craft 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 Delta 9 and BC Craft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta 9 Cannabis and BC Craft Supply, you can compare the effects of market volatilities on Delta 9 and BC Craft 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 Delta 9 with a short position of BC Craft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta 9 and BC Craft.
Diversification Opportunities for Delta 9 and BC Craft
Pay attention - limited upside
The 3 months correlation between Delta and CRFTF is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta 9 Cannabis and BC Craft Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Craft Supply and Delta 9 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 Delta 9 Cannabis are associated (or correlated) with BC Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Craft Supply has no effect on the direction of Delta 9 i.e., Delta 9 and BC Craft go up and down completely randomly.
Pair Corralation between Delta 9 and BC Craft
Assuming the 90 days horizon Delta 9 is expected to generate 12.8 times less return on investment than BC Craft. But when comparing it to its historical volatility, Delta 9 Cannabis is 2.81 times less risky than BC Craft. It trades about 0.01 of its potential returns per unit of risk. BC Craft Supply is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.65 in BC Craft Supply on September 1, 2024 and sell it today you would lose (1.31) from holding BC Craft Supply or give up 49.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta 9 Cannabis vs. BC Craft Supply
Performance |
| Timeline |
| Delta 9 Cannabis |
| BC Craft Supply |
Delta 9 and BC Craft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta 9 and BC Craft
The main advantage of trading using opposite Delta 9 and BC Craft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta 9 position performs unexpectedly, BC Craft 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 BC Craft will offset losses from the drop in BC Craft's long position.The idea behind Delta 9 Cannabis and BC Craft Supply pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BC Craft vs. Holloman Energy Corp | BC Craft vs. cbdMD Inc | BC Craft vs. Evolus Inc | BC Craft vs. CV Sciences |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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