Correlation Between Integrated Cannabis and Rimrock Gold
Can any of the company-specific risk be diversified away by investing in both Integrated Cannabis and Rimrock Gold 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 Rimrock Gold 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 Rimrock Gold Corp, you can compare the effects of market volatilities on Integrated Cannabis and Rimrock Gold 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 Rimrock Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Cannabis and Rimrock Gold.
Diversification Opportunities for Integrated Cannabis and Rimrock Gold
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Integrated and Rimrock is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Cannabis Solutions and Rimrock Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimrock Gold 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 Rimrock Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimrock Gold Corp has no effect on the direction of Integrated Cannabis i.e., Integrated Cannabis and Rimrock Gold go up and down completely randomly.
Pair Corralation between Integrated Cannabis and Rimrock Gold
Given the investment horizon of 90 days Integrated Cannabis Solutions is expected to generate 1.23 times more return on investment than Rimrock Gold. However, Integrated Cannabis is 1.23 times more volatile than Rimrock Gold Corp. It trades about 0.1 of its potential returns per unit of risk. Rimrock Gold Corp is currently generating about 0.06 per unit of risk. If you would invest 0.11 in Integrated Cannabis Solutions on August 29, 2024 and sell it today you would earn a total of 0.23 from holding Integrated Cannabis Solutions or generate 209.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Cannabis Solutions vs. Rimrock Gold Corp
Performance |
| Timeline |
| Integrated Cannabis |
| Rimrock Gold Corp |
Integrated Cannabis and Rimrock Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Cannabis and Rimrock Gold
The main advantage of trading using opposite Integrated Cannabis and Rimrock Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Cannabis position performs unexpectedly, Rimrock Gold 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 Rimrock Gold will offset losses from the drop in Rimrock Gold's long position.The idea behind Integrated Cannabis Solutions and Rimrock Gold Corp 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.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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