Correlation Between 1CM and Cann American
Can any of the company-specific risk be diversified away by investing in both 1CM 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 1CM and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1CM Inc and Cann American Corp, you can compare the effects of market volatilities on 1CM 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 1CM with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1CM and Cann American.
Diversification Opportunities for 1CM and Cann American
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 1CM and Cann is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding 1CM Inc 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 1CM 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 1CM Inc 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 1CM i.e., 1CM and Cann American go up and down completely randomly.
Pair Corralation between 1CM and Cann American
Assuming the 90 days horizon 1CM Inc is expected to under-perform the Cann American. But the otc stock apears to be less risky and, when comparing its historical volatility, 1CM Inc is 18.53 times less risky than Cann American. The otc stock trades about -0.21 of its potential returns per unit of risk. The Cann American Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.45 in Cann American Corp on September 13, 2024 and sell it today you would lose (0.13) from holding Cann American Corp or give up 28.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1CM Inc vs. Cann American Corp
Performance |
| Timeline |
| 1CM Inc |
| Cann American Corp |
1CM and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1CM and Cann American
The main advantage of trading using opposite 1CM and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1CM 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.| 1CM vs. 4Front Ventures Corp | 1CM vs. Khiron Life Sciences | 1CM vs. BellRock Brands | 1CM vs. Elixinol Global |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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