Correlation Between Green Cures and Delta 9
Can any of the company-specific risk be diversified away by investing in both Green Cures and Delta 9 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 Delta 9 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 Delta 9 Cannabis, you can compare the effects of market volatilities on Green Cures and Delta 9 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 Delta 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Delta 9.
Diversification Opportunities for Green Cures and Delta 9
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Delta is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Delta 9 Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta 9 Cannabis 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 Delta 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta 9 Cannabis has no effect on the direction of Green Cures i.e., Green Cures and Delta 9 go up and down completely randomly.
Pair Corralation between Green Cures and Delta 9
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 20.58 times more return on investment than Delta 9. However, Green Cures is 20.58 times more volatile than Delta 9 Cannabis. It trades about 0.17 of its potential returns per unit of risk. Delta 9 Cannabis is currently generating about -0.21 per unit of risk. If you would invest 0.02 in Green Cures Botanical on August 29, 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. Delta 9 Cannabis
Performance |
| Timeline |
| Green Cures Botanical |
| Delta 9 Cannabis |
Green Cures and Delta 9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Delta 9
The main advantage of trading using opposite Green Cures and Delta 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Delta 9 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 Delta 9 will offset losses from the drop in Delta 9's long position.The idea behind Green Cures Botanical and Delta 9 Cannabis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Delta 9 vs. Benchmark Botanics | Delta 9 vs. Speakeasy Cannabis Club | Delta 9 vs. City View Green | Delta 9 vs. BC Craft Supply |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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