Correlation Between Elixinol Global and Cannabis Strategic
Can any of the company-specific risk be diversified away by investing in both Elixinol Global and Cannabis Strategic 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 Elixinol Global and Cannabis Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elixinol Global and Cannabis Strategic Ventures, you can compare the effects of market volatilities on Elixinol Global and Cannabis Strategic 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 Elixinol Global with a short position of Cannabis Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elixinol Global and Cannabis Strategic.
Diversification Opportunities for Elixinol Global and Cannabis Strategic
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elixinol and Cannabis is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Elixinol Global and Cannabis Strategic Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Strategic and Elixinol Global 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 Elixinol Global are associated (or correlated) with Cannabis Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Strategic has no effect on the direction of Elixinol Global i.e., Elixinol Global and Cannabis Strategic go up and down completely randomly.
Pair Corralation between Elixinol Global and Cannabis Strategic
Assuming the 90 days horizon Elixinol Global is expected to generate 8.31 times less return on investment than Cannabis Strategic. But when comparing it to its historical volatility, Elixinol Global is 3.61 times less risky than Cannabis Strategic. It trades about 0.11 of its potential returns per unit of risk. Cannabis Strategic Ventures is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Cannabis Strategic Ventures on September 13, 2024 and sell it today you would lose (0.69) from holding Cannabis Strategic Ventures or give up 98.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Elixinol Global vs. Cannabis Strategic Ventures
Performance |
| Timeline |
| Elixinol Global |
| Cannabis Strategic |
Elixinol Global and Cannabis Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elixinol Global and Cannabis Strategic
The main advantage of trading using opposite Elixinol Global and Cannabis Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elixinol Global position performs unexpectedly, Cannabis Strategic 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 Cannabis Strategic will offset losses from the drop in Cannabis Strategic's long position.| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
| Cannabis Strategic vs. 4Front Ventures Corp | Cannabis Strategic vs. Khiron Life Sciences | Cannabis Strategic vs. BellRock Brands | Cannabis Strategic vs. Elixinol Global |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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