Correlation Between Metals Acquisition and Canna Global
Can any of the company-specific risk be diversified away by investing in both Metals Acquisition and Canna 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 Metals Acquisition and Canna Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Acquisition Limited and Canna Global Acquisition, you can compare the effects of market volatilities on Metals Acquisition and Canna 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 Metals Acquisition with a short position of Canna Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Acquisition and Canna Global.
Diversification Opportunities for Metals Acquisition and Canna Global
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metals and Canna is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Metals Acquisition Limited and Canna Global Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canna Global Acquisition and Metals Acquisition 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 Metals Acquisition Limited are associated (or correlated) with Canna Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canna Global Acquisition has no effect on the direction of Metals Acquisition i.e., Metals Acquisition and Canna Global go up and down completely randomly.
Pair Corralation between Metals Acquisition and Canna Global
Given the investment horizon of 90 days Metals Acquisition is expected to generate 43.2 times less return on investment than Canna Global. In addition to that, Metals Acquisition is 1.58 times more volatile than Canna Global Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Canna Global Acquisition is currently generating about 0.04 per unit of volatility. If you would invest 1,131 in Canna Global Acquisition on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Canna Global Acquisition or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 14.4% |
| Values | Daily Returns |
Metals Acquisition Limited vs. Canna Global Acquisition
Performance |
| Timeline |
| Metals Acquisition |
| Canna Global Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Metals Acquisition and Canna Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Acquisition and Canna Global
The main advantage of trading using opposite Metals Acquisition and Canna Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Acquisition position performs unexpectedly, Canna 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 Canna Global will offset losses from the drop in Canna Global's long position.The idea behind Metals Acquisition Limited and Canna Global Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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