Correlation Between Slang Worldwide and Cann American
Can any of the company-specific risk be diversified away by investing in both Slang Worldwide and Cann American 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 Slang Worldwide and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slang Worldwide and Cann American Corp, you can compare the effects of market volatilities on Slang Worldwide and Cann American 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 Slang Worldwide with a short position of Cann American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slang Worldwide and Cann American.
Diversification Opportunities for Slang Worldwide and Cann American
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Slang and Cann is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Slang Worldwide and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and Slang Worldwide 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 Slang Worldwide are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of Slang Worldwide i.e., Slang Worldwide and Cann American go up and down completely randomly.
Pair Corralation between Slang Worldwide and Cann American
Assuming the 90 days horizon Slang Worldwide is expected to generate 2.2 times more return on investment than Cann American. However, Slang Worldwide is 2.2 times more volatile than Cann American Corp. It trades about 0.08 of its potential returns per unit of risk. Cann American Corp is currently generating about -0.02 per unit of risk. If you would invest 0.90 in Slang Worldwide on September 12, 2024 and sell it today you would lose (0.59) from holding Slang Worldwide or give up 65.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slang Worldwide vs. Cann American Corp
Performance |
| Timeline |
| Slang Worldwide |
| Cann American Corp |
Slang Worldwide and Cann American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slang Worldwide and Cann American
The main advantage of trading using opposite Slang Worldwide and Cann American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slang Worldwide position performs unexpectedly, Cann American 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 Cann American will offset losses from the drop in Cann American's long position.| Slang Worldwide vs. 4Front Ventures Corp | Slang Worldwide vs. Khiron Life Sciences | Slang Worldwide vs. BellRock Brands | Slang Worldwide vs. Elixinol Global |
| Cann American vs. 4Front Ventures Corp | Cann American vs. Khiron Life Sciences | Cann American vs. BellRock Brands | Cann American 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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