Correlation Between Pure Harvest and Greater Cannabis
Can any of the company-specific risk be diversified away by investing in both Pure Harvest and Greater Cannabis 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 Pure Harvest and Greater Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Harvest Cannabis and Greater Cannabis, you can compare the effects of market volatilities on Pure Harvest and Greater Cannabis 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 Pure Harvest with a short position of Greater Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Harvest and Greater Cannabis.
Diversification Opportunities for Pure Harvest and Greater Cannabis
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pure and Greater is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pure Harvest Cannabis and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis and Pure Harvest 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 Pure Harvest Cannabis are associated (or correlated) with Greater Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Cannabis has no effect on the direction of Pure Harvest i.e., Pure Harvest and Greater Cannabis go up and down completely randomly.
Pair Corralation between Pure Harvest and Greater Cannabis
Given the investment horizon of 90 days Pure Harvest Cannabis is expected to generate 2.17 times more return on investment than Greater Cannabis. However, Pure Harvest is 2.17 times more volatile than Greater Cannabis. It trades about 0.08 of its potential returns per unit of risk. Greater Cannabis is currently generating about 0.06 per unit of risk. If you would invest 1.40 in Pure Harvest Cannabis on September 13, 2024 and sell it today you would lose (1.13) from holding Pure Harvest Cannabis or give up 80.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Harvest Cannabis vs. Greater Cannabis
Performance |
| Timeline |
| Pure Harvest Cannabis |
| Greater Cannabis |
Pure Harvest and Greater Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Harvest and Greater Cannabis
The main advantage of trading using opposite Pure Harvest and Greater Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Harvest position performs unexpectedly, Greater Cannabis 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 Greater Cannabis will offset losses from the drop in Greater Cannabis' long position.| Pure Harvest vs. 4Front Ventures Corp | Pure Harvest vs. Khiron Life Sciences | Pure Harvest vs. BellRock Brands | Pure Harvest vs. Elixinol Global |
| Greater Cannabis vs. 4Front Ventures Corp | Greater Cannabis vs. Khiron Life Sciences | Greater Cannabis vs. BellRock Brands | Greater Cannabis vs. Elixinol Global |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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