Correlation Between Indivior PLC and Im Cannabis
Can any of the company-specific risk be diversified away by investing in both Indivior PLC and Im Cannabis 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 Indivior PLC and Im Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indivior PLC Ordinary and Im Cannabis Corp, you can compare the effects of market volatilities on Indivior PLC and Im Cannabis 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 Indivior PLC with a short position of Im Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indivior PLC and Im Cannabis.
Diversification Opportunities for Indivior PLC and Im Cannabis
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indivior and IMCC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indivior PLC Ordinary and Im Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Im Cannabis Corp and Indivior PLC 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 Indivior PLC Ordinary are associated (or correlated) with Im Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Im Cannabis Corp has no effect on the direction of Indivior PLC i.e., Indivior PLC and Im Cannabis go up and down completely randomly.
Pair Corralation between Indivior PLC and Im Cannabis
Given the investment horizon of 90 days Indivior PLC is expected to generate 1.52 times less return on investment than Im Cannabis. But when comparing it to its historical volatility, Indivior PLC Ordinary is 1.47 times less risky than Im Cannabis. It trades about 0.26 of its potential returns per unit of risk. Im Cannabis Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 201.00 in Im Cannabis Corp on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Im Cannabis Corp or generate 39.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indivior PLC Ordinary vs. Im Cannabis Corp
Performance |
| Timeline |
| Indivior PLC Ordinary |
| Im Cannabis Corp |
Indivior PLC and Im Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indivior PLC and Im Cannabis
The main advantage of trading using opposite Indivior PLC and Im Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indivior PLC position performs unexpectedly, Im Cannabis 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 Im Cannabis will offset losses from the drop in Im Cannabis' long position.| Indivior PLC vs. PennantPark Floating Rate | Indivior PLC vs. Monster Beverage Corp | Indivior PLC vs. SNDL Inc | Indivior PLC vs. Oatly Group AB |
| Im Cannabis vs. Clever Leaves Holdings | Im Cannabis vs. Khiron Life Sciences | Im Cannabis vs. Allied Corp | Im Cannabis vs. Biofrontera |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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