Correlation Between CbdMD and Kona Gold
Can any of the company-specific risk be diversified away by investing in both CbdMD and Kona Gold 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 Kona Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and Kona Gold Solutions, you can compare the effects of market volatilities on CbdMD and Kona Gold 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 Kona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Kona Gold.
Diversification Opportunities for CbdMD and Kona Gold
Very weak diversification
The 3 months correlation between CbdMD and Kona is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Kona Gold Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kona Gold Solutions 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 Kona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kona Gold Solutions has no effect on the direction of CbdMD i.e., CbdMD and Kona Gold go up and down completely randomly.
Pair Corralation between CbdMD and Kona Gold
Given the investment horizon of 90 days CbdMD is expected to generate 9.25 times less return on investment than Kona Gold. But when comparing it to its historical volatility, cbdMD Inc is 5.7 times less risky than Kona Gold. It trades about 0.08 of its potential returns per unit of risk. Kona Gold Solutions is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Kona Gold Solutions on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Kona Gold Solutions or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cbdMD Inc vs. Kona Gold Solutions
Performance |
| Timeline |
| cbdMD Inc |
| Kona Gold Solutions |
CbdMD and Kona Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and Kona Gold
The main advantage of trading using opposite CbdMD and Kona Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, Kona Gold 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 Kona Gold will offset losses from the drop in Kona Gold's long position.| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
| Kona Gold vs. North American Cannabis | Kona Gold vs. Medical Marijuana I | Kona Gold vs. Green Cures Botanical | Kona Gold vs. Cannabis Global |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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