Correlation Between THC Therapeutics and CannTrust Holdings
Can any of the company-specific risk be diversified away by investing in both THC Therapeutics and CannTrust Holdings 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 THC Therapeutics and CannTrust Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THC Therapeutics and CannTrust Holdings, you can compare the effects of market volatilities on THC Therapeutics and CannTrust Holdings 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 THC Therapeutics with a short position of CannTrust Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of THC Therapeutics and CannTrust Holdings.
Diversification Opportunities for THC Therapeutics and CannTrust Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THC and CannTrust is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding THC Therapeutics and CannTrust Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CannTrust Holdings and THC Therapeutics 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 THC Therapeutics are associated (or correlated) with CannTrust Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CannTrust Holdings has no effect on the direction of THC Therapeutics i.e., THC Therapeutics and CannTrust Holdings go up and down completely randomly.
Pair Corralation between THC Therapeutics and CannTrust Holdings
If you would invest 0.04 in THC Therapeutics on August 25, 2024 and sell it today you would earn a total of 0.42 from holding THC Therapeutics or generate 1050.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
THC Therapeutics vs. CannTrust Holdings
Performance |
| Timeline |
| THC Therapeutics |
| CannTrust Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
THC Therapeutics and CannTrust Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THC Therapeutics and CannTrust Holdings
The main advantage of trading using opposite THC Therapeutics and CannTrust Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THC Therapeutics position performs unexpectedly, CannTrust Holdings 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 CannTrust Holdings will offset losses from the drop in CannTrust Holdings' long position.| THC Therapeutics vs. Link Reservations | THC Therapeutics vs. MERCK Kommanditgesellschaft auf | THC Therapeutics vs. Greater Cannabis | THC Therapeutics vs. Global Hemp Group |
| CannTrust Holdings vs. Acreage Holdings | CannTrust Holdings vs. BZAM | CannTrust Holdings vs. Choom Holdings | CannTrust Holdings vs. Stem Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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