Correlation Between Cannabis Suisse and Dakshidin

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

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

Diversification Opportunities for Cannabis Suisse and Dakshidin

-0.24

Correlation Coefficient

Cannabis Suisse  Dakshidin

Very good diversification

The 3 months correlation between Cannabis and Dakshidin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cannabis Suisse Corp and Dakshidin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dakshidin and Cannabis Suisse 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 Cannabis Suisse Corp are associated (or correlated) with Dakshidin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dakshidin has no effect on the direction of Cannabis Suisse i.e., Cannabis Suisse and Dakshidin go up and down completely randomly.

Pair Corralation between Cannabis Suisse and Dakshidin

Given the investment horizon of 90 days Cannabis Suisse Corp is expected to generate 5.99 times more return on investment than Dakshidin. However, Cannabis Suisse is 5.99 times more volatile than Dakshidin Corporation. It trades about 0.14 of its potential returns per unit of risk. Dakshidin Corporation is currently generating about 0.13 per unit of risk. If you would invest  1.25  in Cannabis Suisse Corp on September 4, 2024 and sell it today you would earn a total of  0.65  from holding Cannabis Suisse Corp or generate 52.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Cannabis Suisse Corp  vs.  Dakshidin Corp.

Cannabis Suisse Corp

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Suisse Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Cannabis Suisse demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Dakshidin

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dakshidin Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Dakshidin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cannabis Suisse and Dakshidin

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

The idea behind Cannabis Suisse Corp and Dakshidin Corporation 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.