Correlation Between Entourage Health and Cannabis Strategic

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

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

Diversification Opportunities for Entourage Health and Cannabis Strategic

-0.16

Correlation Coefficient

Entourage Health  Cannabis Strategic

Good diversification

The 3 months correlation between Entourage and Cannabis is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Cannabis Strategic Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Strategic and Entourage Health 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 Entourage Health Corp are associated (or correlated) with Cannabis Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Strategic has no effect on the direction of Entourage Health i.e., Entourage Health and Cannabis Strategic go up and down completely randomly.

Pair Corralation between Entourage Health and Cannabis Strategic

If you would invest  0.53  in Entourage Health Corp on September 13, 2024 and sell it today you would earn a total of  0.20  from holding Entourage Health Corp or generate 37.74% return on investment over 90 days.

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

Entourage Health Corp  vs.  Cannabis Strategic Ventures

Entourage Health Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Entourage Health Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Entourage Health reported solid returns over the last few months and may actually be approaching a breakup point.

Cannabis Strategic

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Strategic Ventures are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Cannabis Strategic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entourage Health and Cannabis Strategic

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

The idea behind Entourage Health Corp and Cannabis Strategic Ventures 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.