Correlation Between C21 Investments and Avicanna

Can any of the company-specific risk be diversified away by investing in both C21 Investments and Avicanna 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 C21 Investments and Avicanna into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C21 Investments and Avicanna, you can compare the effects of market volatilities on C21 Investments and Avicanna 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 C21 Investments with a short position of Avicanna. Check out your portfolio center. Please also check ongoing floating volatility patterns of C21 Investments and Avicanna.

Diversification Opportunities for C21 Investments and Avicanna

-0.48

Correlation Coefficient

C21 Investments  Avicanna

Very good diversification

The 3 months correlation between C21 and Avicanna is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and Avicanna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avicanna and C21 Investments 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 C21 Investments are associated (or correlated) with Avicanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avicanna has no effect on the direction of C21 Investments i.e., C21 Investments and Avicanna go up and down completely randomly.

Pair Corralation between C21 Investments and Avicanna

Assuming the 90 days horizon C21 Investments is expected to generate 1.41 times less return on investment than Avicanna. But when comparing it to its historical volatility, C21 Investments is 1.06 times less risky than Avicanna. It trades about 0.04 of its potential returns per unit of risk. Avicanna is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Avicanna on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Avicanna or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

C21 Investments  vs.  Avicanna

C21 Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C21 Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, C21 Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Avicanna

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Avicanna are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Avicanna reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C21 Investments and Avicanna

The main advantage of trading using opposite C21 Investments and Avicanna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C21 Investments position performs unexpectedly, Avicanna 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 Avicanna will offset losses from the drop in Avicanna's long position.

The idea behind C21 Investments and Avicanna 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.