Correlation Between Im Cannabis and Allied Corp
Can any of the company-specific risk be diversified away by investing in both Im Cannabis and Allied Corp 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 Im Cannabis and Allied Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Im Cannabis Corp and Allied Corp, you can compare the effects of market volatilities on Im Cannabis and Allied Corp 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 Im Cannabis with a short position of Allied Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Im Cannabis and Allied Corp.
Diversification Opportunities for Im Cannabis and Allied Corp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IMCC and Allied is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Im Cannabis Corp and Allied Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Corp and Im 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 Im Cannabis Corp are associated (or correlated) with Allied Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Corp has no effect on the direction of Im Cannabis i.e., Im Cannabis and Allied Corp go up and down completely randomly.
Pair Corralation between Im Cannabis and Allied Corp
Given the investment horizon of 90 days Im Cannabis is expected to generate 137.4 times less return on investment than Allied Corp. But when comparing it to its historical volatility, Im Cannabis Corp is 2.04 times less risky than Allied Corp. It trades about 0.0 of its potential returns per unit of risk. Allied Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Allied Corp on August 26, 2024 and sell it today you would lose (19.26) from holding Allied Corp or give up 80.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Im Cannabis Corp vs. Allied Corp
Performance |
| Timeline |
| Im Cannabis Corp |
| Allied Corp |
Im Cannabis and Allied Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Im Cannabis and Allied Corp
The main advantage of trading using opposite Im Cannabis and Allied Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Im Cannabis position performs unexpectedly, Allied Corp 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 Allied Corp will offset losses from the drop in Allied Corp's long position.| Im Cannabis vs. Clever Leaves Holdings | Im Cannabis vs. Khiron Life Sciences | Im Cannabis vs. Allied Corp | Im Cannabis vs. Biofrontera |
| Allied Corp vs. The BC Bud | Allied Corp vs. Amexdrug | Allied Corp vs. Aion Therapeutic | Allied Corp vs. Antisense Therapeutics Limited |
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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