Correlation Between Premier Biomedical and Cann American

Can any of the company-specific risk be diversified away by investing in both Premier Biomedical and Cann American 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 Premier Biomedical and Cann American into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Premier Biomedical and Cann American

-0.06

Correlation Coefficient

Premier Biomedical  Cann American

Good diversification

The 3 months correlation between Premier and Cann is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Premier Biomedical and Cann American Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cann American Corp and Premier Biomedical 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 Premier Biomedical are associated (or correlated) with Cann American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cann American Corp has no effect on the direction of Premier Biomedical i.e., Premier Biomedical and Cann American go up and down completely randomly.

Pair Corralation between Premier Biomedical and Cann American

Given the investment horizon of 90 days Premier Biomedical is expected to under-perform the Cann American. But the pink sheet apears to be less risky and, when comparing its historical volatility, Premier Biomedical is 1.26 times less risky than Cann American. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Cann American Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Cann American Corp on September 2, 2024 and sell it today you would lose (0.08) from holding Cann American Corp or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Premier Biomedical  vs.  Cann American Corp

Premier Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premier Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cann American Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cann American Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Cann American sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Premier Biomedical and Cann American

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

The idea behind Premier Biomedical and Cann American 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.