Correlation Between Embrace Change and Canna Global
Can any of the company-specific risk be diversified away by investing in both Embrace Change and Canna Global 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 Embrace Change and Canna Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embrace Change Acquisition and Canna Global Acquisition, you can compare the effects of market volatilities on Embrace Change and Canna Global 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 Embrace Change with a short position of Canna Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Canna Global.
Diversification Opportunities for Embrace Change and Canna Global
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embrace and Canna is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Canna Global Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canna Global Acquisition and Embrace Change 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 Embrace Change Acquisition are associated (or correlated) with Canna Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canna Global Acquisition has no effect on the direction of Embrace Change i.e., Embrace Change and Canna Global go up and down completely randomly.
Pair Corralation between Embrace Change and Canna Global
Given the investment horizon of 90 days Embrace Change is expected to generate 1.09 times less return on investment than Canna Global. But when comparing it to its historical volatility, Embrace Change Acquisition is 3.85 times less risky than Canna Global. It trades about 0.17 of its potential returns per unit of risk. Canna Global Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,021 in Canna Global Acquisition on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Canna Global Acquisition or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.04% |
| Values | Daily Returns |
Embrace Change Acquisition vs. Canna Global Acquisition
Performance |
| Timeline |
| Embrace Change Acqui |
| Canna Global Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Embrace Change and Canna Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embrace Change and Canna Global
The main advantage of trading using opposite Embrace Change and Canna Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change position performs unexpectedly, Canna Global 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 Canna Global will offset losses from the drop in Canna Global's long position.| Embrace Change vs. China Health Management | Embrace Change vs. Absolute Health and | Embrace Change vs. Supurva Healthcare Group | Embrace Change vs. TransAKT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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