Correlation Between THC Therapeutics and Elixinol Global
Can any of the company-specific risk be diversified away by investing in both THC Therapeutics and Elixinol Global 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 Elixinol Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THC Therapeutics and Elixinol Global, you can compare the effects of market volatilities on THC Therapeutics and Elixinol Global 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 Elixinol Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of THC Therapeutics and Elixinol Global.
Diversification Opportunities for THC Therapeutics and Elixinol Global
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between THC and Elixinol is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding THC Therapeutics and Elixinol Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixinol Global 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 Elixinol Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixinol Global has no effect on the direction of THC Therapeutics i.e., THC Therapeutics and Elixinol Global go up and down completely randomly.
Pair Corralation between THC Therapeutics and Elixinol Global
Given the investment horizon of 90 days THC Therapeutics is expected to generate 1.66 times more return on investment than Elixinol Global. However, THC Therapeutics is 1.66 times more volatile than Elixinol Global. It trades about 0.07 of its potential returns per unit of risk. Elixinol Global is currently generating about 0.01 per unit of risk. If you would invest 0.10 in THC Therapeutics on November 27, 2024 and sell it today you would lose (0.08) from holding THC Therapeutics or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THC Therapeutics vs. Elixinol Global
Performance |
| Timeline |
| THC Therapeutics |
| Elixinol Global |
THC Therapeutics and Elixinol Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THC Therapeutics and Elixinol Global
The main advantage of trading using opposite THC Therapeutics and Elixinol Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THC Therapeutics position performs unexpectedly, Elixinol Global 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 Elixinol Global will offset losses from the drop in Elixinol Global's long position.| THC Therapeutics vs. BlackRock Science Tech | THC Therapeutics vs. Blackrock Innovation Growth | THC Therapeutics vs. Virtus Allianzgi Artificial | THC Therapeutics vs. Highland Floating Rate |
| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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