Correlation Between CordovaCann Corp and Cann American
Can any of the company-specific risk be diversified away by investing in both CordovaCann Corp and Cann American 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 CordovaCann Corp and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CordovaCann Corp and Cann American Corp, you can compare the effects of market volatilities on CordovaCann Corp and Cann American 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 CordovaCann Corp with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of CordovaCann Corp and Cann American.
Diversification Opportunities for CordovaCann Corp and Cann American
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CordovaCann and Cann is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CordovaCann Corp and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and CordovaCann Corp 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 CordovaCann Corp are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of CordovaCann Corp i.e., CordovaCann Corp and Cann American go up and down completely randomly.
Pair Corralation between CordovaCann Corp and Cann American
Assuming the 90 days horizon CordovaCann Corp is expected to generate 1.08 times more return on investment than Cann American. However, CordovaCann Corp is 1.08 times more volatile than Cann American Corp. It trades about 0.07 of its potential returns per unit of risk. Cann American Corp is currently generating about -0.06 per unit of risk. If you would invest 3.10 in CordovaCann Corp on August 29, 2024 and sell it today you would lose (0.10) from holding CordovaCann Corp or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CordovaCann Corp vs. Cann American Corp
Performance |
| Timeline |
| CordovaCann Corp |
| Cann American Corp |
CordovaCann Corp and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CordovaCann Corp and Cann American
The main advantage of trading using opposite CordovaCann Corp and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CordovaCann Corp position performs unexpectedly, Cann American 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 Cann American will offset losses from the drop in Cann American's long position.| CordovaCann Corp vs. Green Cures Botanical | CordovaCann Corp vs. Cann American Corp | CordovaCann Corp vs. Rimrock Gold Corp | CordovaCann Corp vs. Galexxy Holdings |
| Cann American vs. Green Cures Botanical | Cann American vs. Rimrock Gold Corp | Cann American vs. Galexxy Holdings | Cann American vs. Genomma Lab Internacional |
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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