Correlation Between ATT and Greater Cannabis
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and Greater Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Greater Cannabis, you can compare the effects of market volatilities on ATT 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 ATT with a short position of Greater Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Greater Cannabis.
Diversification Opportunities for ATT and Greater Cannabis
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ATT and Greater is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis and ATT 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 ATT Inc 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 ATT i.e., ATT and Greater Cannabis go up and down completely randomly.
Pair Corralation between ATT and Greater Cannabis
Taking into account the 90-day investment horizon ATT is expected to generate 9.45 times less return on investment than Greater Cannabis. But when comparing it to its historical volatility, ATT Inc is 9.27 times less risky than Greater Cannabis. It trades about 0.07 of its potential returns per unit of risk. Greater Cannabis is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Greater Cannabis on November 19, 2024 and sell it today you would earn a total of 0.01 from holding Greater Cannabis or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Greater Cannabis
Performance |
| Timeline |
| ATT Inc |
| Greater Cannabis |
ATT and Greater Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Greater Cannabis
The main advantage of trading using opposite ATT and Greater Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.| ATT vs. Liberty Global PLC | ATT vs. Liberty Latin America | ATT vs. Liberty Latin America | ATT vs. Liberty Broadband Srs |
| Greater Cannabis vs. Global Hemp Group | Greater Cannabis vs. Cannabis Suisse Corp | Greater Cannabis vs. Maple Leaf Green | Greater Cannabis vs. Mc Endvrs |
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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