Correlation Between Indo Global and Acreage Holdings
Can any of the company-specific risk be diversified away by investing in both Indo Global and Acreage Holdings 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 Indo Global and Acreage Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Global Exchange and Acreage Holdings, you can compare the effects of market volatilities on Indo Global and Acreage Holdings 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 Indo Global with a short position of Acreage Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Global and Acreage Holdings.
Diversification Opportunities for Indo Global and Acreage Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Acreage is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange and Acreage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acreage Holdings and Indo Global 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 Indo Global Exchange are associated (or correlated) with Acreage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acreage Holdings has no effect on the direction of Indo Global i.e., Indo Global and Acreage Holdings go up and down completely randomly.
Pair Corralation between Indo Global and Acreage Holdings
Given the investment horizon of 90 days Indo Global Exchange is expected to generate 0.56 times more return on investment than Acreage Holdings. However, Indo Global Exchange is 1.8 times less risky than Acreage Holdings. It trades about 0.13 of its potential returns per unit of risk. Acreage Holdings is currently generating about 0.05 per unit of risk. If you would invest 0.05 in Indo Global Exchange on August 26, 2024 and sell it today you would earn a total of 0.01 from holding Indo Global Exchange or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Global Exchange vs. Acreage Holdings
Performance |
| Timeline |
| Indo Global Exchange |
| Acreage Holdings |
Indo Global and Acreage Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Global and Acreage Holdings
The main advantage of trading using opposite Indo Global and Acreage Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Global position performs unexpectedly, Acreage Holdings 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 Acreage Holdings will offset losses from the drop in Acreage Holdings' long position.| Indo Global vs. Cann American Corp | Indo Global vs. GelStat Corp | Indo Global vs. Green Cures Botanical | Indo Global vs. For The Earth |
| Acreage Holdings vs. Green Cures Botanical | Acreage Holdings vs. Indoor Harvest Corp | Acreage Holdings vs. Speakeasy Cannabis Club | Acreage Holdings vs. Benchmark Botanics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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