Correlation Between North Bud and Benchmark Botanics
Can any of the company-specific risk be diversified away by investing in both North Bud and Benchmark Botanics 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 North Bud and Benchmark Botanics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Bud Farms and Benchmark Botanics, you can compare the effects of market volatilities on North Bud and Benchmark Botanics 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 North Bud with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Bud and Benchmark Botanics.
Diversification Opportunities for North Bud and Benchmark Botanics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between North and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding North Bud Farms and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and North Bud 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 North Bud Farms are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of North Bud i.e., North Bud and Benchmark Botanics go up and down completely randomly.
Pair Corralation between North Bud and Benchmark Botanics
If you would invest 0.34 in Benchmark Botanics on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Benchmark Botanics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Bud Farms vs. Benchmark Botanics
Performance |
| Timeline |
| North Bud Farms |
| Benchmark Botanics |
North Bud and Benchmark Botanics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Bud and Benchmark Botanics
The main advantage of trading using opposite North Bud and Benchmark Botanics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Bud position performs unexpectedly, Benchmark Botanics 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 Benchmark Botanics will offset losses from the drop in Benchmark Botanics' long position.| North Bud vs. Benchmark Botanics | North Bud vs. Speakeasy Cannabis Club | North Bud vs. City View Green | North Bud vs. BC Craft Supply |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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