Correlation Between Frontera and Canna Consumer

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

By analyzing existing cross correlation between Frontera Group and Canna Consumer Goods, you can compare the effects of market volatilities on Frontera and Canna Consumer 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 Frontera with a short position of Canna Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera and Canna Consumer.

Diversification Opportunities for Frontera and Canna Consumer

0.0

Correlation Coefficient

Frontera  Canna Consumer

Pay attention - limited upside

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

Pair Corralation between Frontera and Canna Consumer

If you would invest  0.01  in Frontera Group on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Frontera Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Frontera Group  vs.  Canna Consumer Goods

Frontera Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Canna Consumer Goods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canna Consumer Goods has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively steady which may send shares a bit higher in February 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Pair Trading with Frontera and Canna Consumer

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

The idea behind Frontera Group and Canna Consumer Goods 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.