Correlation Between Western Investment and OrganiGram Holdings
Can any of the company-specific risk be diversified away by investing in both Western Investment and OrganiGram 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 Western Investment and OrganiGram Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and OrganiGram Holdings, you can compare the effects of market volatilities on Western Investment and OrganiGram 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 Western Investment with a short position of OrganiGram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and OrganiGram Holdings.
Diversification Opportunities for Western Investment and OrganiGram Holdings
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and OrganiGram is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings and Western Investment 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 Western Investment are associated (or correlated) with OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of Western Investment i.e., Western Investment and OrganiGram Holdings go up and down completely randomly.
Pair Corralation between Western Investment and OrganiGram Holdings
Given the investment horizon of 90 days Western Investment is expected to generate 1.41 times more return on investment than OrganiGram Holdings. However, Western Investment is 1.41 times more volatile than OrganiGram Holdings. It trades about 0.2 of its potential returns per unit of risk. OrganiGram Holdings is currently generating about 0.01 per unit of risk. If you would invest 41.00 in Western Investment on September 15, 2024 and sell it today you would earn a total of 8.00 from holding Western Investment or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Investment vs. OrganiGram Holdings
Performance |
| Timeline |
| Western Investment |
| OrganiGram Holdings |
Western Investment and OrganiGram Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Investment and OrganiGram Holdings
The main advantage of trading using opposite Western Investment and OrganiGram Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment position performs unexpectedly, OrganiGram 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 OrganiGram Holdings will offset losses from the drop in OrganiGram Holdings' long position.| Western Investment vs. Berkshire Hathaway CDR | Western Investment vs. E L Financial Corp | Western Investment vs. E L Financial 3 | Western Investment vs. Molson Coors Canada |
| OrganiGram Holdings vs. Canadian Imperial Bank | OrganiGram Holdings vs. Element Fleet Management | OrganiGram Holdings vs. Income Financial Trust | OrganiGram Holdings vs. Highwood Asset Management |
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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