Correlation Between C21 Investments and Silver Spike

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

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

Diversification Opportunities for C21 Investments and Silver Spike

-0.03

Correlation Coefficient

C21 Investments  Silver Spike

Good diversification

The 3 months correlation between C21 and Silver is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding C21 Investments and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment 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 Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of C21 Investments i.e., C21 Investments and Silver Spike go up and down completely randomly.

Pair Corralation between C21 Investments and Silver Spike

Assuming the 90 days horizon C21 Investments is expected to generate 8.99 times more return on investment than Silver Spike. However, C21 Investments is 8.99 times more volatile than Silver Spike Investment. It trades about 0.07 of its potential returns per unit of risk. Silver Spike Investment is currently generating about 0.0 per unit of risk. If you would invest  22.00  in C21 Investments on September 3, 2024 and sell it today you would earn a total of  1.00  from holding C21 Investments or generate 4.55% return on investment over 90 days.

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

C21 Investments  vs.  Silver Spike Investment

C21 Investments

Risk-Adjusted Performance

2 of 100

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.

Silver Spike Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Spike Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Silver Spike exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C21 Investments and Silver Spike

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

The idea behind C21 Investments and Silver Spike Investment 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.