Correlation Between C21 Investments and Molecule Holdings

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

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

Diversification Opportunities for C21 Investments and Molecule Holdings

0.0

Correlation Coefficient

C21 Investments  Molecule Holdings

Pay attention - limited upside

The 3 months correlation between C21 and Molecule is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and Molecule Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecule Holdings 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 Molecule Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecule Holdings has no effect on the direction of C21 Investments i.e., C21 Investments and Molecule Holdings go up and down completely randomly.

Pair Corralation between C21 Investments and Molecule Holdings

If you would invest  0.25  in Molecule Holdings on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Molecule Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

C21 Investments  vs.  Molecule Holdings

C21 Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days C21 Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Molecule Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Molecule Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Molecule Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with C21 Investments and Molecule Holdings

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

The idea behind C21 Investments and Molecule Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.