Correlation Between Cannara Biotech and Leef Brands
Can any of the company-specific risk be diversified away by investing in both Cannara Biotech and Leef Brands 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 Leef Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannara Biotech and Leef Brands, you can compare the effects of market volatilities on Cannara Biotech and Leef Brands 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 Leef Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannara Biotech and Leef Brands.
Diversification Opportunities for Cannara Biotech and Leef Brands
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cannara and Leef is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cannara Biotech and Leef Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leef Brands 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 Leef Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leef Brands has no effect on the direction of Cannara Biotech i.e., Cannara Biotech and Leef Brands go up and down completely randomly.
Pair Corralation between Cannara Biotech and Leef Brands
Assuming the 90 days horizon Cannara Biotech is expected to generate 3.18 times less return on investment than Leef Brands. But when comparing it to its historical volatility, Cannara Biotech is 1.77 times less risky than Leef Brands. It trades about 0.03 of its potential returns per unit of risk. Leef Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Leef Brands on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Leef Brands or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannara Biotech vs. Leef Brands
Performance |
| Timeline |
| Cannara Biotech |
| Leef Brands |
Cannara Biotech and Leef Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannara Biotech and Leef Brands
The main advantage of trading using opposite Cannara Biotech and Leef Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannara Biotech position performs unexpectedly, Leef Brands 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 Leef Brands will offset losses from the drop in Leef Brands' 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 |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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