Correlation Between Integrated Cannabis and Premier Biomedical

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

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

Diversification Opportunities for Integrated Cannabis and Premier Biomedical

-0.34

Correlation Coefficient

Integrated Cannabis  Premier Biomedical

Very good diversification

The 3 months correlation between Integrated and Premier is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Cannabis Solutions and Premier Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Biomedical and Integrated Cannabis 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 Integrated Cannabis Solutions are associated (or correlated) with Premier Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Biomedical has no effect on the direction of Integrated Cannabis i.e., Integrated Cannabis and Premier Biomedical go up and down completely randomly.

Pair Corralation between Integrated Cannabis and Premier Biomedical

Given the investment horizon of 90 days Integrated Cannabis Solutions is expected to generate 0.54 times more return on investment than Premier Biomedical. However, Integrated Cannabis Solutions is 1.84 times less risky than Premier Biomedical. It trades about 0.14 of its potential returns per unit of risk. Premier Biomedical is currently generating about 0.03 per unit of risk. If you would invest  0.38  in Integrated Cannabis Solutions on December 30, 2024 and sell it today you would earn a total of  0.24  from holding Integrated Cannabis Solutions or generate 63.16% return on investment over 90 days.

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

Integrated Cannabis Solutions  vs.  Premier Biomedical

Integrated Cannabis

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Cannabis Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Integrated Cannabis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Premier Biomedical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Biomedical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, Premier Biomedical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integrated Cannabis and Premier Biomedical

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

The idea behind Integrated Cannabis Solutions and Premier Biomedical 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.