Correlation Between Cann American and Priority Aviation

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

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

Diversification Opportunities for Cann American and Priority Aviation

0.0

Correlation Coefficient

Cann American  Priority Aviation

Pay attention - limited upside

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

Pair Corralation between Cann American and Priority Aviation

If you would invest  0.39  in Cann American Corp on December 28, 2024 and sell it today you would lose (0.01) from holding Cann American Corp or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Cann American Corp  vs.  Priority Aviation

Cann American Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cann American Corp are ranked lower than 5 (%) 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.

Priority Aviation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Priority Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Priority Aviation is not utilizing all of its potentials. The new stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cann American and Priority Aviation

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

The idea behind Cann American Corp and Priority Aviation 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..