Correlation Between Integrated Cannabis and Cann American
Can any of the company-specific risk be diversified away by investing in both Integrated Cannabis 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 Integrated Cannabis and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Cannabis Solutions and Cann American Corp, you can compare the effects of market volatilities on Integrated Cannabis 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 Integrated Cannabis with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Cannabis and Cann American.
Diversification Opportunities for Integrated Cannabis and Cann American
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Integrated and Cann is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Cannabis Solutions 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 Integrated Cannabis 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 Integrated Cannabis Solutions 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 Integrated Cannabis i.e., Integrated Cannabis and Cann American go up and down completely randomly.
Pair Corralation between Integrated Cannabis and Cann American
Given the investment horizon of 90 days Integrated Cannabis Solutions is expected to generate 0.79 times more return on investment than Cann American. However, Integrated Cannabis Solutions is 1.27 times less risky than Cann American. It trades about 0.12 of its potential returns per unit of risk. Cann American Corp is currently generating about 0.09 per unit of risk. If you would invest 0.08 in Integrated Cannabis Solutions on August 25, 2024 and sell it today you would earn a total of 0.29 from holding Integrated Cannabis Solutions or generate 362.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Cannabis Solutions vs. Cann American Corp
Performance |
| Timeline |
| Integrated Cannabis |
| Cann American Corp |
Integrated Cannabis and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Cannabis and Cann American
The main advantage of trading using opposite Integrated Cannabis and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Cannabis 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.| Integrated Cannabis vs. Speakeasy Cannabis Club | Integrated Cannabis vs. City View Green | Integrated Cannabis vs. Benchmark Botanics | Integrated Cannabis vs. Ravenquest Biomed |
| Cann American vs. Green Cures Botanical | Cann American vs. Galexxy Holdings | Cann American vs. Indoor Harvest Corp | Cann American 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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