Correlation Between Green Cures and Stemsation International
Can any of the company-specific risk be diversified away by investing in both Green Cures and Stemsation International 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 Stemsation International 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 Stemsation International, you can compare the effects of market volatilities on Green Cures and Stemsation International 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 Stemsation International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Stemsation International.
Diversification Opportunities for Green Cures and Stemsation International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Stemsation is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Stemsation International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stemsation International 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 Stemsation International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stemsation International has no effect on the direction of Green Cures i.e., Green Cures and Stemsation International go up and down completely randomly.
Pair Corralation between Green Cures and Stemsation International
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 2.22 times more return on investment than Stemsation International. However, Green Cures is 2.22 times more volatile than Stemsation International. It trades about 0.2 of its potential returns per unit of risk. Stemsation International is currently generating about 0.1 per unit of risk. If you would invest 0.01 in Green Cures Botanical on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Green Cures Botanical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Stemsation International
Performance |
| Timeline |
| Green Cures Botanical |
| Stemsation International |
Green Cures and Stemsation International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Stemsation International
The main advantage of trading using opposite Green Cures and Stemsation International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Stemsation International 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 Stemsation International will offset losses from the drop in Stemsation International'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 |
| Stemsation International vs. Green Cures Botanical | Stemsation International vs. Galexxy Holdings | Stemsation International vs. Indoor Harvest Corp | Stemsation International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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