Correlation Between HLS Therapeutics and Cann American
Can any of the company-specific risk be diversified away by investing in both HLS Therapeutics and Cann American 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 HLS Therapeutics and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HLS Therapeutics and Cann American Corp, you can compare the effects of market volatilities on HLS Therapeutics and Cann American 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 HLS Therapeutics with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of HLS Therapeutics and Cann American.
Diversification Opportunities for HLS Therapeutics and Cann American
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HLS and Cann is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HLS Therapeutics and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and HLS Therapeutics 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 HLS Therapeutics are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of HLS Therapeutics i.e., HLS Therapeutics and Cann American go up and down completely randomly.
Pair Corralation between HLS Therapeutics and Cann American
Assuming the 90 days horizon HLS Therapeutics is expected to under-perform the Cann American. But the pink sheet apears to be less risky and, when comparing its historical volatility, HLS Therapeutics is 4.65 times less risky than Cann American. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Cann American Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.89 in Cann American Corp on September 12, 2024 and sell it today you would lose (0.74) from holding Cann American Corp or give up 83.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HLS Therapeutics vs. Cann American Corp
Performance |
| Timeline |
| HLS Therapeutics |
| Cann American Corp |
HLS Therapeutics and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HLS Therapeutics and Cann American
The main advantage of trading using opposite HLS Therapeutics and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HLS Therapeutics position performs unexpectedly, Cann American 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 Cann American will offset losses from the drop in Cann American's long position.| HLS Therapeutics vs. 4Front Ventures Corp | HLS Therapeutics vs. Khiron Life Sciences | HLS Therapeutics vs. BellRock Brands | HLS Therapeutics vs. Elixinol Global |
| Cann American vs. 4Front Ventures Corp | Cann American vs. Khiron Life Sciences | Cann American vs. BellRock Brands | Cann American vs. Elixinol Global |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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