Correlation Between Greater Cannabis and Herborium
Can any of the company-specific risk be diversified away by investing in both Greater Cannabis and Herborium 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 Greater Cannabis and Herborium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greater Cannabis and Herborium Group, you can compare the effects of market volatilities on Greater Cannabis and Herborium 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 Greater Cannabis with a short position of Herborium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greater Cannabis and Herborium.
Diversification Opportunities for Greater Cannabis and Herborium
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Greater and Herborium is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Greater Cannabis and Herborium Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herborium Group and Greater 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 Greater Cannabis are associated (or correlated) with Herborium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herborium Group has no effect on the direction of Greater Cannabis i.e., Greater Cannabis and Herborium go up and down completely randomly.
Pair Corralation between Greater Cannabis and Herborium
Given the investment horizon of 90 days Greater Cannabis is expected to generate 7.77 times less return on investment than Herborium. But when comparing it to its historical volatility, Greater Cannabis is 2.83 times less risky than Herborium. It trades about 0.06 of its potential returns per unit of risk. Herborium Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Herborium Group on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Herborium Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.79% |
| Values | Daily Returns |
Greater Cannabis vs. Herborium Group
Performance |
| Timeline |
| Greater Cannabis |
| Herborium Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Greater Cannabis and Herborium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greater Cannabis and Herborium
The main advantage of trading using opposite Greater Cannabis and Herborium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greater Cannabis position performs unexpectedly, Herborium 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 Herborium will offset losses from the drop in Herborium's long position.| Greater Cannabis vs. Global Hemp Group | Greater Cannabis vs. Cannabis Suisse Corp | Greater Cannabis vs. Maple Leaf Green | Greater Cannabis vs. Mc Endvrs |
| Herborium vs. Cann American Corp | Herborium vs. GelStat Corp | Herborium vs. Green Cures Botanical | Herborium vs. Nutranomics |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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