Correlation Between Green Cures and Marijuana
Can any of the company-specific risk be diversified away by investing in both Green Cures and Marijuana 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 Marijuana 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 Marijuana, you can compare the effects of market volatilities on Green Cures and Marijuana 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 Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Marijuana.
Diversification Opportunities for Green Cures and Marijuana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Green and Marijuana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Marijuana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marijuana 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 Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marijuana has no effect on the direction of Green Cures i.e., Green Cures and Marijuana go up and down completely randomly.
Pair Corralation between Green Cures and Marijuana
Given the investment horizon of 90 days Green Cures is expected to generate 2.14 times less return on investment than Marijuana. But when comparing it to its historical volatility, Green Cures Botanical is 3.2 times less risky than Marijuana. It trades about 0.2 of its potential returns per unit of risk. Marijuana is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Marijuana on September 1, 2024 and sell it today you would lose (0.01) from holding Marijuana or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Marijuana
Performance |
| Timeline |
| Green Cures Botanical |
| Marijuana |
Green Cures and Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Marijuana
The main advantage of trading using opposite Green Cures and Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Marijuana 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 Marijuana will offset losses from the drop in Marijuana's long position.| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest Corp |
| Marijuana vs. Priority Aviation | Marijuana vs. Cbd Life Sciences | Marijuana vs. Hemp Inc | Marijuana vs. Emergent Health Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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