Correlation Between Intertek Group and Cannagrow Holdings

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

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

Diversification Opportunities for Intertek Group and Cannagrow Holdings

-0.24

Correlation Coefficient

Intertek Group  Cannagrow Holdings

Very good diversification

The 3 months correlation between Intertek and Cannagrow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Intertek Group Plc and Cannagrow Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannagrow Holdings and Intertek Group 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 Intertek Group Plc are associated (or correlated) with Cannagrow Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannagrow Holdings has no effect on the direction of Intertek Group i.e., Intertek Group and Cannagrow Holdings go up and down completely randomly.

Pair Corralation between Intertek Group and Cannagrow Holdings

If you would invest  2.80  in Cannagrow Holdings on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Cannagrow Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Intertek Group Plc  vs.  Cannagrow Holdings

Intertek Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intertek Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Intertek Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Cannagrow Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cannagrow Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Cannagrow Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Intertek Group and Cannagrow Holdings

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

The idea behind Intertek Group Plc and Cannagrow 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.