Correlation Between Trustcash Holdings and Medical Marijuana
Can any of the company-specific risk be diversified away by investing in both Trustcash Holdings and Medical Marijuana 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 Trustcash Holdings and Medical Marijuana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trustcash Holdings and Medical Marijuana I, you can compare the effects of market volatilities on Trustcash Holdings and Medical Marijuana 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 Trustcash Holdings with a short position of Medical Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trustcash Holdings and Medical Marijuana.
Diversification Opportunities for Trustcash Holdings and Medical Marijuana
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trustcash and Medical is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Trustcash Holdings and Medical Marijuana I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Marijuana and Trustcash 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 Trustcash Holdings are associated (or correlated) with Medical Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Marijuana has no effect on the direction of Trustcash Holdings i.e., Trustcash Holdings and Medical Marijuana go up and down completely randomly.
Pair Corralation between Trustcash Holdings and Medical Marijuana
Given the investment horizon of 90 days Trustcash Holdings is expected to under-perform the Medical Marijuana. In addition to that, Trustcash Holdings is 1.12 times more volatile than Medical Marijuana I. It trades about -0.09 of its total potential returns per unit of risk. Medical Marijuana I is currently generating about -0.07 per unit of volatility. If you would invest 0.19 in Medical Marijuana I on August 29, 2024 and sell it today you would lose (0.13) from holding Medical Marijuana I or give up 68.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Trustcash Holdings vs. Medical Marijuana I
Performance |
| Timeline |
| Trustcash Holdings |
| Medical Marijuana |
Trustcash Holdings and Medical Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trustcash Holdings and Medical Marijuana
The main advantage of trading using opposite Trustcash Holdings and Medical Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trustcash Holdings position performs unexpectedly, Medical Marijuana 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 Medical Marijuana will offset losses from the drop in Medical Marijuana's long position.| Trustcash Holdings vs. Remote Dynamics | Trustcash Holdings vs. Wellstar International | Trustcash Holdings vs. Encounter Technologi | Trustcash Holdings vs. Health Sciences Gr |
| Medical Marijuana vs. American Green | Medical Marijuana vs. North American Cannabis | Medical Marijuana vs. Marijuana | Medical Marijuana vs. Rimrock Gold 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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