Correlation Between CbdMD and Jushi Holdings
Can any of the company-specific risk be diversified away by investing in both CbdMD and Jushi 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 CbdMD and Jushi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and Jushi Holdings, you can compare the effects of market volatilities on CbdMD and Jushi 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 CbdMD with a short position of Jushi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Jushi Holdings.
Diversification Opportunities for CbdMD and Jushi Holdings
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CbdMD and Jushi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Jushi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jushi Holdings 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 Jushi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jushi Holdings has no effect on the direction of CbdMD i.e., CbdMD and Jushi Holdings go up and down completely randomly.
Pair Corralation between CbdMD and Jushi Holdings
Given the investment horizon of 90 days cbdMD Inc is expected to generate 0.64 times more return on investment than Jushi Holdings. However, cbdMD Inc is 1.55 times less risky than Jushi Holdings. It trades about -0.03 of its potential returns per unit of risk. Jushi Holdings is currently generating about -0.05 per unit of risk. If you would invest 57.00 in cbdMD Inc on September 2, 2024 and sell it today you would lose (8.00) from holding cbdMD Inc or give up 14.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cbdMD Inc vs. Jushi Holdings
Performance |
| Timeline |
| cbdMD Inc |
| Jushi Holdings |
CbdMD and Jushi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and Jushi Holdings
The main advantage of trading using opposite CbdMD and Jushi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, Jushi 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 Jushi Holdings will offset losses from the drop in Jushi Holdings' long position.| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
| Jushi Holdings vs. Verano Holdings Corp | Jushi Holdings vs. Ascend Wellness Holdings | Jushi Holdings vs. Green Thumb Industries | Jushi Holdings vs. AYR Strategies Class |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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