Correlation Between CbdMD and C21 Investments
Can any of the company-specific risk be diversified away by investing in both CbdMD and C21 Investments 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 CbdMD and C21 Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and C21 Investments, you can compare the effects of market volatilities on CbdMD and C21 Investments 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 CbdMD with a short position of C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and C21 Investments.
Diversification Opportunities for CbdMD and C21 Investments
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CbdMD and C21 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments and CbdMD 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 cbdMD Inc are associated (or correlated) with C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of CbdMD i.e., CbdMD and C21 Investments go up and down completely randomly.
Pair Corralation between CbdMD and C21 Investments
Given the investment horizon of 90 days CbdMD is expected to generate 15.15 times less return on investment than C21 Investments. But when comparing it to its historical volatility, cbdMD Inc is 1.76 times less risky than C21 Investments. It trades about 0.01 of its potential returns per unit of risk. C21 Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22.00 in C21 Investments on August 31, 2024 and sell it today you would earn a total of 2.00 from holding C21 Investments or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cbdMD Inc vs. C21 Investments
Performance |
| Timeline |
| cbdMD Inc |
| C21 Investments |
CbdMD and C21 Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and C21 Investments
The main advantage of trading using opposite CbdMD and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' long position.| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
| C21 Investments vs. Holloman Energy Corp | C21 Investments vs. cbdMD Inc | C21 Investments vs. Evolus Inc | C21 Investments vs. CV Sciences |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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