Correlation Between Lotus Ventures and TransCanna Holdings
Can any of the company-specific risk be diversified away by investing in both Lotus Ventures and TransCanna Holdings 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 Lotus Ventures and TransCanna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Ventures and TransCanna Holdings, you can compare the effects of market volatilities on Lotus Ventures and TransCanna Holdings 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 Lotus Ventures with a short position of TransCanna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Ventures and TransCanna Holdings.
Diversification Opportunities for Lotus Ventures and TransCanna Holdings
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lotus and TransCanna is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Ventures and TransCanna Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransCanna Holdings and Lotus Ventures 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 Lotus Ventures are associated (or correlated) with TransCanna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransCanna Holdings has no effect on the direction of Lotus Ventures i.e., Lotus Ventures and TransCanna Holdings go up and down completely randomly.
Pair Corralation between Lotus Ventures and TransCanna Holdings
Assuming the 90 days horizon Lotus Ventures is expected to generate 4.93 times more return on investment than TransCanna Holdings. However, Lotus Ventures is 4.93 times more volatile than TransCanna Holdings. It trades about 0.07 of its potential returns per unit of risk. TransCanna Holdings is currently generating about -0.06 per unit of risk. If you would invest 1.20 in Lotus Ventures on August 26, 2024 and sell it today you would lose (0.69) from holding Lotus Ventures or give up 57.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 73.09% |
| Values | Daily Returns |
Lotus Ventures vs. TransCanna Holdings
Performance |
| Timeline |
| Lotus Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TransCanna Holdings |
Lotus Ventures and TransCanna Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Ventures and TransCanna Holdings
The main advantage of trading using opposite Lotus Ventures and TransCanna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Ventures position performs unexpectedly, TransCanna Holdings 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 TransCanna Holdings will offset losses from the drop in TransCanna Holdings' long position.| Lotus Ventures vs. Benchmark Botanics | Lotus Ventures vs. Speakeasy Cannabis Club | Lotus Ventures vs. City View Green | Lotus Ventures vs. BC Craft Supply |
| TransCanna Holdings vs. Green Cures Botanical | TransCanna Holdings vs. Galexxy Holdings | TransCanna Holdings vs. Indoor Harvest Corp | TransCanna Holdings vs. Speakeasy Cannabis Club |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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