Correlation Between Green Cures and Australis Capital
Can any of the company-specific risk be diversified away by investing in both Green Cures and Australis Capital 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 Green Cures and Australis Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cures Botanical and Australis Capital, you can compare the effects of market volatilities on Green Cures and Australis Capital 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 Green Cures with a short position of Australis Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Australis Capital.
Diversification Opportunities for Green Cures and Australis Capital
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Australis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Australis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australis Capital and Green Cures 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 Green Cures Botanical are associated (or correlated) with Australis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australis Capital has no effect on the direction of Green Cures i.e., Green Cures and Australis Capital go up and down completely randomly.
Pair Corralation between Green Cures and Australis Capital
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 2.04 times more return on investment than Australis Capital. However, Green Cures is 2.04 times more volatile than Australis Capital. It trades about 0.14 of its potential returns per unit of risk. Australis Capital is currently generating about 0.09 per unit of risk. If you would invest 0.02 in Green Cures Botanical on August 26, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Australis Capital
Performance |
| Timeline |
| Green Cures Botanical |
| Australis Capital |
Green Cures and Australis Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Australis Capital
The main advantage of trading using opposite Green Cures and Australis Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Australis Capital 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 Australis Capital will offset losses from the drop in Australis Capital's long position.| Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest Corp | Green Cures vs. Speakeasy Cannabis Club | Green Cures vs. Benchmark Botanics |
| Australis Capital vs. Green Cures Botanical | Australis Capital vs. Galexxy Holdings | Australis Capital vs. Indoor Harvest Corp | Australis Capital vs. Speakeasy Cannabis Club |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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