Correlation Between North American and Green Cures
Can any of the company-specific risk be diversified away by investing in both North American and Green Cures 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 North American and Green Cures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Cannabis and Green Cures Botanical, you can compare the effects of market volatilities on North American and Green Cures 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 North American with a short position of Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Green Cures.
Diversification Opportunities for North American and Green Cures
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between North and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding North American Cannabis and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical and North American 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 North American Cannabis are associated (or correlated) with Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of North American i.e., North American and Green Cures go up and down completely randomly.
Pair Corralation between North American and Green Cures
Given the investment horizon of 90 days North American Cannabis is expected to generate 6.46 times more return on investment than Green Cures. However, North American is 6.46 times more volatile than Green Cures Botanical. It trades about 0.25 of its potential returns per unit of risk. Green Cures Botanical is currently generating about 0.15 per unit of risk. If you would invest 0.01 in North American Cannabis on August 29, 2024 and sell it today you would lose (0.01) from holding North American Cannabis or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Cannabis vs. Green Cures Botanical
Performance |
| Timeline |
| North American Cannabis |
| Green Cures Botanical |
North American and Green Cures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Green Cures
The main advantage of trading using opposite North American and Green Cures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Green Cures 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 Green Cures will offset losses from the drop in Green Cures' long position.| North American vs. Cbd Life Sciences | North American vs. FutureWorld Corp | North American vs. Now Corp | North American vs. For The Earth |
| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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