Correlation Between Trulieve Cannabis and CbdMD
Can any of the company-specific risk be diversified away by investing in both Trulieve Cannabis and CbdMD 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 Trulieve Cannabis and CbdMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trulieve Cannabis Corp and cbdMD Inc, you can compare the effects of market volatilities on Trulieve Cannabis and CbdMD 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 Trulieve Cannabis with a short position of CbdMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trulieve Cannabis and CbdMD.
Diversification Opportunities for Trulieve Cannabis and CbdMD
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trulieve and CbdMD is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Trulieve Cannabis Corp and cbdMD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cbdMD Inc and Trulieve Cannabis 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 Trulieve Cannabis Corp are associated (or correlated) with CbdMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cbdMD Inc has no effect on the direction of Trulieve Cannabis i.e., Trulieve Cannabis and CbdMD go up and down completely randomly.
Pair Corralation between Trulieve Cannabis and CbdMD
Assuming the 90 days horizon Trulieve Cannabis Corp is expected to under-perform the CbdMD. In addition to that, Trulieve Cannabis is 2.06 times more volatile than cbdMD Inc. It trades about -0.25 of its total potential returns per unit of risk. cbdMD Inc is currently generating about -0.09 per unit of volatility. If you would invest 54.00 in cbdMD Inc on August 28, 2024 and sell it today you would lose (7.00) from holding cbdMD Inc or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trulieve Cannabis Corp vs. cbdMD Inc
Performance |
| Timeline |
| Trulieve Cannabis Corp |
| cbdMD Inc |
Trulieve Cannabis and CbdMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trulieve Cannabis and CbdMD
The main advantage of trading using opposite Trulieve Cannabis and CbdMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trulieve Cannabis position performs unexpectedly, CbdMD 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 CbdMD will offset losses from the drop in CbdMD's long position.| Trulieve Cannabis vs. Rezolute | Trulieve Cannabis vs. Tempest Therapeutics | Trulieve Cannabis vs. Forte Biosciences | Trulieve Cannabis vs. Dyadic International |
| CbdMD vs. Capricor Therapeutics | CbdMD vs. Soleno Therapeutics | CbdMD vs. Bio Path Holdings | CbdMD vs. Moleculin Biotech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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