Correlation Between Greater Cannabis and Pure Harvest
Can any of the company-specific risk be diversified away by investing in both Greater Cannabis and Pure Harvest 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 Pure Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greater Cannabis and Pure Harvest Cannabis, you can compare the effects of market volatilities on Greater Cannabis and Pure Harvest 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 Pure Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greater Cannabis and Pure Harvest.
Diversification Opportunities for Greater Cannabis and Pure Harvest
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greater and Pure is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Greater Cannabis and Pure Harvest Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Harvest Cannabis 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 Pure Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Harvest Cannabis has no effect on the direction of Greater Cannabis i.e., Greater Cannabis and Pure Harvest go up and down completely randomly.
Pair Corralation between Greater Cannabis and Pure Harvest
Given the investment horizon of 90 days Greater Cannabis is expected to generate 3.02 times less return on investment than Pure Harvest. But when comparing it to its historical volatility, Greater Cannabis is 2.17 times less risky than Pure Harvest. It trades about 0.06 of its potential returns per unit of risk. Pure Harvest Cannabis is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Pure Harvest Cannabis on September 13, 2024 and sell it today you would lose (1.13) from holding Pure Harvest Cannabis or give up 80.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greater Cannabis vs. Pure Harvest Cannabis
Performance |
| Timeline |
| Greater Cannabis |
| Pure Harvest Cannabis |
Greater Cannabis and Pure Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greater Cannabis and Pure Harvest
The main advantage of trading using opposite Greater Cannabis and Pure Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greater Cannabis position performs unexpectedly, Pure Harvest 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 Pure Harvest will offset losses from the drop in Pure Harvest's long position.| Greater Cannabis vs. 4Front Ventures Corp | Greater Cannabis vs. Khiron Life Sciences | Greater Cannabis vs. BellRock Brands | Greater Cannabis vs. Elixinol Global |
| Pure Harvest vs. 4Front Ventures Corp | Pure Harvest vs. Khiron Life Sciences | Pure Harvest vs. BellRock Brands | Pure Harvest 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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