Correlation Between CbdMD and Indo Global
Can any of the company-specific risk be diversified away by investing in both CbdMD and Indo 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 CbdMD and Indo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and Indo Global Exchange, you can compare the effects of market volatilities on CbdMD and Indo 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 CbdMD with a short position of Indo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Indo Global.
Diversification Opportunities for CbdMD and Indo Global
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CbdMD and Indo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Indo Global Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Global Exchange 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 Indo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Global Exchange has no effect on the direction of CbdMD i.e., CbdMD and Indo Global go up and down completely randomly.
Pair Corralation between CbdMD and Indo Global
Given the investment horizon of 90 days cbdMD Inc is expected to under-perform the Indo Global. But the stock apears to be less risky and, when comparing its historical volatility, cbdMD Inc is 1.54 times less risky than Indo Global. The stock trades about -0.03 of its potential returns per unit of risk. The Indo Global Exchange is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Indo Global Exchange on September 2, 2024 and sell it today you would earn a total of 0.03 from holding Indo Global Exchange or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cbdMD Inc vs. Indo Global Exchange
Performance |
| Timeline |
| cbdMD Inc |
| Indo Global Exchange |
CbdMD and Indo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and Indo Global
The main advantage of trading using opposite CbdMD and Indo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, Indo 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 Indo Global will offset losses from the drop in Indo Global's long position.| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
| Indo Global vs. Cann American Corp | Indo Global vs. GelStat Corp | Indo Global vs. Green Cures Botanical | Indo Global vs. For The Earth |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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