Correlation Between Canntab Therapeutics and Cannlabs

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

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

Diversification Opportunities for Canntab Therapeutics and Cannlabs

0.0

Correlation Coefficient

Canntab Therapeutics  Cannlabs

Pay attention - limited upside

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

Pair Corralation between Canntab Therapeutics and Cannlabs

If you would invest  0.01  in Cannlabs on October 26, 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	97.5%
Values	Daily Returns

Canntab Therapeutics Limited  vs.  Cannlabs

Canntab Therapeutics

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Canntab Therapeutics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Canntab Therapeutics is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cannlabs

Risk-Adjusted Performance

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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.

Pair Trading with Canntab Therapeutics and Cannlabs

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

The idea behind Canntab Therapeutics Limited and Cannlabs 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.