Correlation Between Acreage Holdings and CanaQuest Medical

Can any of the company-specific risk be diversified away by investing in both Acreage Holdings and CanaQuest Medical 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 Acreage Holdings and CanaQuest Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acreage Holdings and CanaQuest Medical Corp, you can compare the effects of market volatilities on Acreage Holdings and CanaQuest Medical 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 Acreage Holdings with a short position of CanaQuest Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acreage Holdings and CanaQuest Medical.

Diversification Opportunities for Acreage Holdings and CanaQuest Medical

0.74

Correlation Coefficient

Acreage Holdings  CanaQuest Medical

Poor diversification

The 3 months correlation between Acreage and CanaQuest is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Acreage Holdings and CanaQuest Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanaQuest Medical Corp and Acreage Holdings 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 Acreage Holdings are associated (or correlated) with CanaQuest Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanaQuest Medical Corp has no effect on the direction of Acreage Holdings i.e., Acreage Holdings and CanaQuest Medical go up and down completely randomly.

Pair Corralation between Acreage Holdings and CanaQuest Medical

Assuming the 90 days horizon Acreage Holdings is expected to under-perform the CanaQuest Medical. But the otc stock apears to be less risky and, when comparing its historical volatility, Acreage Holdings is 1.0 times less risky than CanaQuest Medical. The otc stock trades about 0.0 of its potential returns per unit of risk. The CanaQuest Medical Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4.90  in CanaQuest Medical Corp on September 4, 2024 and sell it today you would lose (1.90) from holding CanaQuest Medical Corp or give up 38.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Acreage Holdings  vs.  CanaQuest Medical Corp

Acreage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acreage Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Acreage Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CanaQuest Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CanaQuest Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, CanaQuest Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Acreage Holdings and CanaQuest Medical

The main advantage of trading using opposite Acreage Holdings and CanaQuest Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acreage Holdings position performs unexpectedly, CanaQuest Medical 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 CanaQuest Medical will offset losses from the drop in CanaQuest Medical's long position.

The idea behind Acreage Holdings and CanaQuest Medical Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.