Correlation Between Hilan and Cannabotech
Can any of the company-specific risk be diversified away by investing in both Hilan and Cannabotech 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 Hilan and Cannabotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilan and Cannabotech, you can compare the effects of market volatilities on Hilan and Cannabotech 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 Hilan with a short position of Cannabotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilan and Cannabotech.
Diversification Opportunities for Hilan and Cannabotech
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilan and Cannabotech is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hilan and Cannabotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabotech and Hilan 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 Hilan are associated (or correlated) with Cannabotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabotech has no effect on the direction of Hilan i.e., Hilan and Cannabotech go up and down completely randomly.
Pair Corralation between Hilan and Cannabotech
Assuming the 90 days trading horizon Hilan is expected to generate 0.18 times more return on investment than Cannabotech. However, Hilan is 5.57 times less risky than Cannabotech. It trades about -0.04 of its potential returns per unit of risk. Cannabotech is currently generating about -0.14 per unit of risk. If you would invest 2,287,000 in Hilan on October 23, 2024 and sell it today you would lose (27,000) from holding Hilan or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilan vs. Cannabotech
Performance |
| Timeline |
| Hilan |
| Cannabotech |
Hilan and Cannabotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilan and Cannabotech
The main advantage of trading using opposite Hilan and Cannabotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilan position performs unexpectedly, Cannabotech 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 Cannabotech will offset losses from the drop in Cannabotech's long position.The idea behind Hilan and Cannabotech 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.| Cannabotech vs. Electreon Wireless | Cannabotech vs. Bezeq Israeli Telecommunication | Cannabotech vs. Gilat Telecom Global | Cannabotech vs. Amot Investments |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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