Correlation Between Filament Health and Cann American
Can any of the company-specific risk be diversified away by investing in both Filament Health and Cann American 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 Filament Health and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Filament Health Corp and Cann American Corp, you can compare the effects of market volatilities on Filament Health and Cann American 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 Filament Health with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filament Health and Cann American.
Diversification Opportunities for Filament Health and Cann American
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Filament and Cann is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Filament Health Corp and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and Filament Health 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 Filament Health Corp are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of Filament Health i.e., Filament Health and Cann American go up and down completely randomly.
Pair Corralation between Filament Health and Cann American
Assuming the 90 days horizon Filament Health is expected to generate 1.32 times less return on investment than Cann American. But when comparing it to its historical volatility, Filament Health Corp is 1.1 times less risky than Cann American. It trades about 0.07 of its potential returns per unit of risk. Cann American Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.22 in Cann American Corp on October 30, 2024 and sell it today you would lose (0.02) from holding Cann American Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Filament Health Corp vs. Cann American Corp
Performance |
| Timeline |
| Filament Health Corp |
| Cann American Corp |
Filament Health and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Filament Health and Cann American
The main advantage of trading using opposite Filament Health and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filament Health position performs unexpectedly, Cann American 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 Cann American will offset losses from the drop in Cann American's long position.| Filament Health vs. Target Group | Filament Health vs. Aequus Pharmaceuticals | Filament Health vs. Sky Century Investment | Filament Health vs. Levitee Labs |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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