Correlation Between Indoor Harvest and Medical Marijuana
Can any of the company-specific risk be diversified away by investing in both Indoor Harvest and Medical Marijuana 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 Indoor Harvest and Medical Marijuana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoor Harvest Corp and Medical Marijuana I, you can compare the effects of market volatilities on Indoor Harvest and Medical Marijuana 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 Indoor Harvest with a short position of Medical Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoor Harvest and Medical Marijuana.
Diversification Opportunities for Indoor Harvest and Medical Marijuana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indoor and Medical is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indoor Harvest Corp and Medical Marijuana I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Marijuana and Indoor Harvest 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 Indoor Harvest Corp are associated (or correlated) with Medical Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Marijuana has no effect on the direction of Indoor Harvest i.e., Indoor Harvest and Medical Marijuana go up and down completely randomly.
Pair Corralation between Indoor Harvest and Medical Marijuana
Given the investment horizon of 90 days Indoor Harvest Corp is expected to generate 1.18 times more return on investment than Medical Marijuana. However, Indoor Harvest is 1.18 times more volatile than Medical Marijuana I. It trades about -0.01 of its potential returns per unit of risk. Medical Marijuana I is currently generating about -0.02 per unit of risk. If you would invest 0.61 in Indoor Harvest Corp on August 29, 2024 and sell it today you would lose (0.60) from holding Indoor Harvest Corp or give up 98.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Indoor Harvest Corp vs. Medical Marijuana I
Performance |
| Timeline |
| Indoor Harvest Corp |
| Medical Marijuana |
Indoor Harvest and Medical Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoor Harvest and Medical Marijuana
The main advantage of trading using opposite Indoor Harvest and Medical Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoor Harvest position performs unexpectedly, Medical Marijuana 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 Medical Marijuana will offset losses from the drop in Medical Marijuana's long position.| Indoor Harvest vs. Green Cures Botanical | Indoor Harvest vs. Cann American Corp | Indoor Harvest vs. Rimrock Gold Corp | Indoor Harvest vs. Galexxy Holdings |
| Medical Marijuana vs. American Green | Medical Marijuana vs. North American Cannabis | Medical Marijuana vs. Marijuana | Medical Marijuana vs. Rimrock Gold Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |