Correlation Between C21 Investments and GelStat Corp

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

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

Diversification Opportunities for C21 Investments and GelStat Corp

0.19

Correlation Coefficient

C21 Investments  GelStat Corp

Average diversification

The 3 months correlation between C21 and GelStat is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp 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 GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of C21 Investments i.e., C21 Investments and GelStat Corp go up and down completely randomly.

Pair Corralation between C21 Investments and GelStat Corp

Assuming the 90 days horizon C21 Investments is expected to generate 0.98 times more return on investment than GelStat Corp. However, C21 Investments is 1.02 times less risky than GelStat Corp. It trades about -0.12 of its potential returns per unit of risk. GelStat Corp is currently generating about -0.22 per unit of risk. If you would invest  21.00  in C21 Investments on October 11, 2024 and sell it today you would lose (3.00) from holding C21 Investments or give up 14.29% of portfolio value over 90 days.

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

C21 Investments  vs.  GelStat Corp

C21 Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C21 Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, C21 Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GelStat Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GelStat Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, GelStat Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C21 Investments and GelStat Corp

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

The idea behind C21 Investments and GelStat Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.