Correlation Between Medmen Enterprises and Cardiol Therapeutics
Can any of the company-specific risk be diversified away by investing in both Medmen Enterprises and Cardiol Therapeutics 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 Medmen Enterprises and Cardiol Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medmen Enterprises Class and Cardiol Therapeutics Class, you can compare the effects of market volatilities on Medmen Enterprises and Cardiol Therapeutics 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 Medmen Enterprises with a short position of Cardiol Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medmen Enterprises and Cardiol Therapeutics.
Diversification Opportunities for Medmen Enterprises and Cardiol Therapeutics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medmen and Cardiol is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Medmen Enterprises Class and Cardiol Therapeutics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiol Therapeutics and Medmen Enterprises 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 Medmen Enterprises Class are associated (or correlated) with Cardiol Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiol Therapeutics has no effect on the direction of Medmen Enterprises i.e., Medmen Enterprises and Cardiol Therapeutics go up and down completely randomly.
Pair Corralation between Medmen Enterprises and Cardiol Therapeutics
Assuming the 90 days horizon Medmen Enterprises Class is expected to generate 8.32 times more return on investment than Cardiol Therapeutics. However, Medmen Enterprises is 8.32 times more volatile than Cardiol Therapeutics Class. It trades about 0.03 of its potential returns per unit of risk. Cardiol Therapeutics Class is currently generating about 0.06 per unit of risk. If you would invest 3.10 in Medmen Enterprises Class on August 29, 2024 and sell it today you would lose (3.09) from holding Medmen Enterprises Class or give up 99.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.62% |
| Values | Daily Returns |
Medmen Enterprises Class vs. Cardiol Therapeutics Class
Performance |
| Timeline |
| Medmen Enterprises Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cardiol Therapeutics |
Medmen Enterprises and Cardiol Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medmen Enterprises and Cardiol Therapeutics
The main advantage of trading using opposite Medmen Enterprises and Cardiol Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medmen Enterprises position performs unexpectedly, Cardiol Therapeutics 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 Cardiol Therapeutics will offset losses from the drop in Cardiol Therapeutics' long position.| Medmen Enterprises vs. Curaleaf Holdings | Medmen Enterprises vs. Green Thumb Industries | Medmen Enterprises vs. Trulieve Cannabis Corp | Medmen Enterprises vs. Verano Holdings Corp |
| Cardiol Therapeutics vs. Flora Growth Corp | Cardiol Therapeutics vs. ABVC Biopharma | Cardiol Therapeutics vs. Indaptus Therapeutics | Cardiol Therapeutics vs. HCW Biologics |
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.
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