Correlation Between Dakshidin and Greater Cannabis

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

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

Diversification Opportunities for Dakshidin and Greater Cannabis

0.45

Correlation Coefficient

Dakshidin  Greater Cannabis

Very weak diversification

The 3 months correlation between Dakshidin and Greater is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dakshidin Corp. and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis and Dakshidin 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 Dakshidin Corporation are associated (or correlated) with Greater Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Cannabis has no effect on the direction of Dakshidin i.e., Dakshidin and Greater Cannabis go up and down completely randomly.

Pair Corralation between Dakshidin and Greater Cannabis

Given the investment horizon of 90 days Dakshidin Corporation is expected to under-perform the Greater Cannabis. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dakshidin Corporation is 1.76 times less risky than Greater Cannabis. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Greater Cannabis is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Greater Cannabis on December 30, 2024 and sell it today you would earn a total of  0.03  from holding Greater Cannabis or generate 75.0% return on investment over 90 days.

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

Dakshidin Corp.  vs.  Greater Cannabis

Dakshidin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dakshidin Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Greater Cannabis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greater Cannabis are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Greater Cannabis displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dakshidin and Greater Cannabis

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

The idea behind Dakshidin Corporation and Greater Cannabis 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.