Correlation Between Medical Marijuana and Sohm
Can any of the company-specific risk be diversified away by investing in both Medical Marijuana and Sohm 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 Medical Marijuana and Sohm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Marijuana I and Sohm Inc, you can compare the effects of market volatilities on Medical Marijuana and Sohm 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 Medical Marijuana with a short position of Sohm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Marijuana and Sohm.
Diversification Opportunities for Medical Marijuana and Sohm
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medical and Sohm is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Medical Marijuana I and Sohm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohm Inc and Medical 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 Medical Marijuana I are associated (or correlated) with Sohm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohm Inc has no effect on the direction of Medical Marijuana i.e., Medical Marijuana and Sohm go up and down completely randomly.
Pair Corralation between Medical Marijuana and Sohm
If you would invest 0.08 in Sohm Inc on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Sohm Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Medical Marijuana I vs. Sohm Inc
Performance |
| Timeline |
| Medical Marijuana |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Medical Marijuana and Sohm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Marijuana and Sohm
The main advantage of trading using opposite Medical Marijuana and Sohm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Marijuana position performs unexpectedly, Sohm 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 Sohm will offset losses from the drop in Sohm's long position.| Medical Marijuana vs. American Green | Medical Marijuana vs. North American Cannabis | Medical Marijuana vs. Marijuana | Medical Marijuana vs. Rimrock Gold Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |