Correlation Between Allstar Health and Nova Cannabis

Can any of the company-specific risk be diversified away by investing in both Allstar Health and Nova Cannabis 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 Allstar Health and Nova Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allstar Health Brands and Nova Cannabis, you can compare the effects of market volatilities on Allstar Health and Nova Cannabis 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 Allstar Health with a short position of Nova Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstar Health and Nova Cannabis.

Diversification Opportunities for Allstar Health and Nova Cannabis

0.0

Correlation Coefficient

Allstar Health  Nova Cannabis

Pay attention - limited upside

The 3 months correlation between Allstar and Nova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allstar Health Brands and Nova Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Cannabis and Allstar Health 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 Allstar Health Brands are associated (or correlated) with Nova Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Cannabis has no effect on the direction of Allstar Health i.e., Allstar Health and Nova Cannabis go up and down completely randomly.

Pair Corralation between Allstar Health and Nova Cannabis

If you would invest (100.00) in Nova Cannabis on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Nova Cannabis or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Allstar Health Brands  vs.  Nova Cannabis

Allstar Health Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allstar Health Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nova Cannabis

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Allstar Health and Nova Cannabis

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

The idea behind Allstar Health Brands and Nova Cannabis 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.