Correlation Between Canna Consumer and Cannabiz Mobile

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

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

Diversification Opportunities for Canna Consumer and Cannabiz Mobile

0.0

Correlation Coefficient

Canna Consumer  Cannabiz Mobile

Pay attention - limited upside

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

Pair Corralation between Canna Consumer and Cannabiz Mobile

Given the investment horizon of 90 days Canna Consumer is expected to generate 22.38 times less return on investment than Cannabiz Mobile. But when comparing it to its historical volatility, Canna Consumer Goods is 7.71 times less risky than Cannabiz Mobile. It trades about 0.02 of its potential returns per unit of risk. Cannabiz Mobile is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cannabiz Mobile on September 17, 2024 and sell it today you would lose (0.01) from holding Cannabiz Mobile or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Canna Consumer Goods  vs.  Cannabiz Mobile

Canna Consumer Goods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canna Consumer Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Canna Consumer revealed solid returns over the last few months and may actually be approaching a breakup point.

Cannabiz Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cannabiz Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Cannabiz Mobile is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Canna Consumer and Cannabiz Mobile

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

The idea behind Canna Consumer Goods and Cannabiz Mobile 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.