Correlation Between Marijuana and Cannabis Global
Can any of the company-specific risk be diversified away by investing in both Marijuana and Cannabis Global 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 Marijuana and Cannabis Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marijuana and Cannabis Global, you can compare the effects of market volatilities on Marijuana and Cannabis Global 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 Marijuana with a short position of Cannabis Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marijuana and Cannabis Global.
Diversification Opportunities for Marijuana and Cannabis Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marijuana and Cannabis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marijuana and Cannabis Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Global and Marijuana 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 Marijuana are associated (or correlated) with Cannabis Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Global has no effect on the direction of Marijuana i.e., Marijuana and Cannabis Global go up and down completely randomly.
Pair Corralation between Marijuana and Cannabis Global
Given the investment horizon of 90 days Marijuana is expected to generate 6.28 times less return on investment than Cannabis Global. But when comparing it to its historical volatility, Marijuana is 2.31 times less risky than Cannabis Global. It trades about 0.13 of its potential returns per unit of risk. Cannabis Global is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Cannabis Global on September 1, 2024 and sell it today you would earn a total of 0.02 from holding Cannabis Global or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Marijuana vs. Cannabis Global
Performance |
| Timeline |
| Marijuana |
| Cannabis Global |
Marijuana and Cannabis Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marijuana and Cannabis Global
The main advantage of trading using opposite Marijuana and Cannabis Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marijuana position performs unexpectedly, Cannabis Global 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 Cannabis Global will offset losses from the drop in Cannabis Global's long position.| Marijuana vs. Priority Aviation | Marijuana vs. Cbd Life Sciences | Marijuana vs. Hemp Inc | Marijuana vs. Emergent Health Corp |
| Cannabis Global vs. Holloman Energy Corp | Cannabis Global vs. cbdMD Inc | Cannabis Global vs. Evolus Inc | Cannabis Global vs. CV Sciences |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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