Correlation Between Global Cannabis and Nextplay Technologies
Can any of the company-specific risk be diversified away by investing in both Global Cannabis and Nextplay Technologies 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 Global Cannabis and Nextplay Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Cannabis Applications and Nextplay Technologies, you can compare the effects of market volatilities on Global Cannabis and Nextplay Technologies 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 Global Cannabis with a short position of Nextplay Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Cannabis and Nextplay Technologies.
Diversification Opportunities for Global Cannabis and Nextplay Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Nextplay is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Global Cannabis Applications and Nextplay Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplay Technologies and Global Cannabis 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 Global Cannabis Applications are associated (or correlated) with Nextplay Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplay Technologies has no effect on the direction of Global Cannabis i.e., Global Cannabis and Nextplay Technologies go up and down completely randomly.
Pair Corralation between Global Cannabis and Nextplay Technologies
Assuming the 90 days horizon Global Cannabis Applications is expected to generate 2.63 times more return on investment than Nextplay Technologies. However, Global Cannabis is 2.63 times more volatile than Nextplay Technologies. It trades about 0.07 of its potential returns per unit of risk. Nextplay Technologies is currently generating about -0.07 per unit of risk. If you would invest 1.68 in Global Cannabis Applications on November 5, 2024 and sell it today you would lose (1.28) from holding Global Cannabis Applications or give up 76.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.52% |
| Values | Daily Returns |
Global Cannabis Applications vs. Nextplay Technologies
Performance |
| Timeline |
| Global Cannabis Appl |
| Nextplay Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Cannabis and Nextplay Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Cannabis and Nextplay Technologies
The main advantage of trading using opposite Global Cannabis and Nextplay Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Cannabis position performs unexpectedly, Nextplay Technologies 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 Nextplay Technologies will offset losses from the drop in Nextplay Technologies' long position.| Global Cannabis vs. Skkynet Cloud Systems | Global Cannabis vs. TonnerOne World Holdings | Global Cannabis vs. Visium Technologies | Global Cannabis vs. Zenvia Inc |
| Nextplay Technologies vs. Datasea | Nextplay Technologies vs. authID Inc | Nextplay Technologies vs. Priority Technology Holdings | Nextplay Technologies vs. Fuse Science |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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