Correlation Between Integrated Cannabis and Golden Developing

Can any of the company-specific risk be diversified away by investing in both Integrated Cannabis and Golden Developing 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 Golden Developing 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 Golden Developing Solutions, you can compare the effects of market volatilities on Integrated Cannabis and Golden Developing 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 Golden Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Cannabis and Golden Developing.

Diversification Opportunities for Integrated Cannabis and Golden Developing

0.37

Correlation Coefficient

Integrated Cannabis  Golden Developing

Weak diversification

The 3 months correlation between Integrated and Golden is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Cannabis Solutions and Golden Developing Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Developing 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 Golden Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Developing has no effect on the direction of Integrated Cannabis i.e., Integrated Cannabis and Golden Developing go up and down completely randomly.

Pair Corralation between Integrated Cannabis and Golden Developing

Given the investment horizon of 90 days Integrated Cannabis is expected to generate 15.13 times less return on investment than Golden Developing. But when comparing it to its historical volatility, Integrated Cannabis Solutions is 16.86 times less risky than Golden Developing. It trades about 0.14 of its potential returns per unit of risk. Golden Developing Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Golden Developing Solutions on December 30, 2024 and sell it today you would earn a total of  0.01  from holding Golden Developing Solutions or generate 9.223372036854776E16% return on investment over 90 days.

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

Integrated Cannabis Solutions  vs.  Golden Developing Solutions

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.

Golden Developing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Developing Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Golden Developing reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integrated Cannabis and Golden Developing

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

The idea behind Integrated Cannabis Solutions and Golden Developing Solutions 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.