Correlation Between C21 Investments and BC Craft
Can any of the company-specific risk be diversified away by investing in both C21 Investments and BC Craft 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 BC Craft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C21 Investments and BC Craft Supply, you can compare the effects of market volatilities on C21 Investments and BC Craft 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 BC Craft. Check out your portfolio center. Please also check ongoing floating volatility patterns of C21 Investments and BC Craft.
Diversification Opportunities for C21 Investments and BC Craft
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between C21 and CRFTF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and BC Craft Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Craft Supply 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 BC Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Craft Supply has no effect on the direction of C21 Investments i.e., C21 Investments and BC Craft go up and down completely randomly.
Pair Corralation between C21 Investments and BC Craft
Assuming the 90 days horizon C21 Investments is expected to generate 17.31 times less return on investment than BC Craft. But when comparing it to its historical volatility, C21 Investments is 6.17 times less risky than BC Craft. It trades about 0.02 of its potential returns per unit of risk. BC Craft Supply is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 53.00 in BC Craft Supply on October 24, 2024 and sell it today you would lose (52.99) from holding BC Craft Supply or give up 99.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.4% |
Values | Daily Returns |
C21 Investments vs. BC Craft Supply
Performance |
Timeline |
C21 Investments |
BC Craft Supply |
C21 Investments and BC Craft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with C21 Investments and BC Craft
The main advantage of trading using opposite C21 Investments and BC Craft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C21 Investments position performs unexpectedly, BC Craft 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 BC Craft will offset losses from the drop in BC Craft's long position.C21 Investments vs. Universal Systems | C21 Investments vs. AAP Inc | C21 Investments vs. Aquagold International | C21 Investments vs. High Yield Municipal Fund |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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