Correlation Between Cannlabs and Canna Consumer

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

By analyzing existing cross correlation between Cannlabs and Canna Consumer Goods, you can compare the effects of market volatilities on Cannlabs and Canna Consumer 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 Cannlabs with a short position of Canna Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannlabs and Canna Consumer.

Diversification Opportunities for Cannlabs and Canna Consumer

0.0

Correlation Coefficient

Cannlabs  Canna Consumer

Pay attention - limited upside

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

Pair Corralation between Cannlabs and Canna Consumer

If you would invest  0.01  in Cannlabs on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Cannlabs or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cannlabs  vs.  Canna Consumer Goods

Cannlabs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cannlabs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cannlabs is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Canna Consumer Goods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canna Consumer Goods has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's primary indicators remain relatively steady which may send shares a bit higher in April 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Pair Trading with Cannlabs and Canna Consumer

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

The idea behind Cannlabs and Canna Consumer Goods 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.