Correlation Between Cannara Biotech and American Green
Can any of the company-specific risk be diversified away by investing in both Cannara Biotech and American Green 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 Cannara Biotech and American Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannara Biotech and American Green, you can compare the effects of market volatilities on Cannara Biotech and American Green 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 Cannara Biotech with a short position of American Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannara Biotech and American Green.
Diversification Opportunities for Cannara Biotech and American Green
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cannara and American is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cannara Biotech and American Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Green and Cannara Biotech 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 Cannara Biotech are associated (or correlated) with American Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Green has no effect on the direction of Cannara Biotech i.e., Cannara Biotech and American Green go up and down completely randomly.
Pair Corralation between Cannara Biotech and American Green
Assuming the 90 days horizon Cannara Biotech is expected to generate 36.24 times less return on investment than American Green. But when comparing it to its historical volatility, Cannara Biotech is 3.71 times less risky than American Green. It trades about 0.01 of its potential returns per unit of risk. American Green is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.04 in American Green on September 1, 2024 and sell it today you would earn a total of 0.02 from holding American Green or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cannara Biotech vs. American Green
Performance |
| Timeline |
| Cannara Biotech |
| American Green |
Cannara Biotech and American Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannara Biotech and American Green
The main advantage of trading using opposite Cannara Biotech and American Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannara Biotech position performs unexpectedly, American Green 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 American Green will offset losses from the drop in American Green's long position.| Cannara Biotech vs. Benchmark Botanics | Cannara Biotech vs. Speakeasy Cannabis Club | Cannara Biotech vs. City View Green | Cannara Biotech vs. BC Craft Supply |
| American Green vs. Greengro Tech | American Green vs. Growlife | American Green vs. Hemp Inc | American Green vs. Easton Pharmaceutica |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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