Correlation Between Canntab Therapeutics and Groove Botanicals

Can any of the company-specific risk be diversified away by investing in both Canntab Therapeutics and Groove Botanicals 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 Groove Botanicals 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 Groove Botanicals, you can compare the effects of market volatilities on Canntab Therapeutics and Groove Botanicals 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 Groove Botanicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canntab Therapeutics and Groove Botanicals.

Diversification Opportunities for Canntab Therapeutics and Groove Botanicals

0.0

Correlation Coefficient

Canntab Therapeutics  Groove Botanicals

Pay attention - limited upside

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

Pair Corralation between Canntab Therapeutics and Groove Botanicals

If you would invest  0.25  in Groove Botanicals on December 20, 2024 and sell it today you would earn a total of  0.35  from holding Groove Botanicals or generate 140.0% return on investment over 90 days.

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

Canntab Therapeutics Limited  vs.  Groove Botanicals

Canntab Therapeutics

Risk-Adjusted Performance

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.

Groove Botanicals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groove Botanicals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Groove Botanicals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canntab Therapeutics and Groove Botanicals

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

The idea behind Canntab Therapeutics Limited and Groove Botanicals 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.