Correlation Between BellRock Brands and IAnthus Capital

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

By analyzing existing cross correlation between BellRock Brands and iAnthus Capital Holdings, you can compare the effects of market volatilities on BellRock Brands and IAnthus Capital 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 BellRock Brands with a short position of IAnthus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BellRock Brands and IAnthus Capital.

Diversification Opportunities for BellRock Brands and IAnthus Capital

0.0

Correlation Coefficient

BellRock Brands  IAnthus Capital

Pay attention - limited upside

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

Pair Corralation between BellRock Brands and IAnthus Capital

If you would invest  0.50  in iAnthus Capital Holdings on December 2, 2024 and sell it today you would earn a total of  0.20  from holding iAnthus Capital Holdings or generate 40.0% return on investment over 90 days.

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

BellRock Brands  vs.  iAnthus Capital Holdings

BellRock Brands

Risk-Adjusted Performance

Very Weak

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

iAnthus Capital Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iAnthus Capital Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IAnthus Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BellRock Brands and IAnthus Capital

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

The idea behind BellRock Brands and iAnthus Capital 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.