Correlation Between Im Cannabis and City View

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

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

Diversification Opportunities for Im Cannabis and City View

0.3

Correlation Coefficient

Im Cannabis  City View

Weak diversification

The 3 months correlation between IMCC and City is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Im Cannabis Corp and City View Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City View Green and Im 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 Im Cannabis Corp are associated (or correlated) with City View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City View Green has no effect on the direction of Im Cannabis i.e., Im Cannabis and City View go up and down completely randomly.

Pair Corralation between Im Cannabis and City View

Given the investment horizon of 90 days Im Cannabis Corp is expected to under-perform the City View. But the stock apears to be less risky and, when comparing its historical volatility, Im Cannabis Corp is 3.95 times less risky than City View. The stock trades about -0.15 of its potential returns per unit of risk. The City View Green is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1.35  in City View Green on December 3, 2024 and sell it today you would lose (0.79) from holding City View Green or give up 58.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Im Cannabis Corp  vs.  City View Green

Im Cannabis Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Im Cannabis Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

City View Green

Risk-Adjusted Performance

Very Weak

Over the last 90 days City View Green has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, City View may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Im Cannabis and City View

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

The idea behind Im Cannabis Corp and City View Green 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.