Correlation Between OrganiGram Holdings and Weed
Can any of the company-specific risk be diversified away by investing in both OrganiGram Holdings and Weed 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 OrganiGram Holdings and Weed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OrganiGram Holdings and Weed Inc, you can compare the effects of market volatilities on OrganiGram Holdings and Weed 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 OrganiGram Holdings with a short position of Weed. Check out your portfolio center. Please also check ongoing floating volatility patterns of OrganiGram Holdings and Weed.
Diversification Opportunities for OrganiGram Holdings and Weed
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OrganiGram and Weed is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding OrganiGram Holdings and Weed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weed Inc and OrganiGram Holdings 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 OrganiGram Holdings are associated (or correlated) with Weed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weed Inc has no effect on the direction of OrganiGram Holdings i.e., OrganiGram Holdings and Weed go up and down completely randomly.
Pair Corralation between OrganiGram Holdings and Weed
Considering the 90-day investment horizon OrganiGram Holdings is expected to under-perform the Weed. But the stock apears to be less risky and, when comparing its historical volatility, OrganiGram Holdings is 4.77 times less risky than Weed. The stock trades about -0.15 of its potential returns per unit of risk. The Weed Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Weed Inc on September 1, 2024 and sell it today you would lose (0.28) from holding Weed Inc or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
OrganiGram Holdings vs. Weed Inc
Performance |
| Timeline |
| OrganiGram Holdings |
| Weed Inc |
OrganiGram Holdings and Weed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OrganiGram Holdings and Weed
The main advantage of trading using opposite OrganiGram Holdings and Weed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OrganiGram Holdings position performs unexpectedly, Weed 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 Weed will offset losses from the drop in Weed's long position.| OrganiGram Holdings vs. Cronos Group | OrganiGram Holdings vs. Aurora Cannabis | OrganiGram Holdings vs. SNDL Inc | OrganiGram Holdings vs. Canopy Growth 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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