Correlation Between Im Cannabis and IAnthus Capital

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

Diversification Opportunities for Im Cannabis and IAnthus Capital

-0.22

Correlation Coefficient

Im Cannabis  IAnthus Capital

Very good diversification

The 3 months correlation between IMCC and IAnthus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Im Cannabis Corp and iAnthus Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iAnthus Capital Holdings 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 IAnthus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iAnthus Capital Holdings has no effect on the direction of Im Cannabis i.e., Im Cannabis and IAnthus Capital go up and down completely randomly.

Pair Corralation between Im Cannabis and IAnthus Capital

Given the investment horizon of 90 days Im Cannabis Corp is expected to under-perform the IAnthus Capital. But the stock apears to be less risky and, when comparing its historical volatility, Im Cannabis Corp is 3.39 times less risky than IAnthus Capital. The stock trades about -0.03 of its potential returns per unit of risk. The iAnthus Capital Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.40  in iAnthus Capital Holdings on December 19, 2024 and sell it today you would earn a total of  0.20  from holding iAnthus Capital Holdings or generate 50.0% return on investment over 90 days.

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

Im Cannabis Corp  vs.  iAnthus Capital Holdings

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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

iAnthus Capital Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iAnthus Capital Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IAnthus Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Im Cannabis and IAnthus Capital

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

The idea behind Im Cannabis Corp and iAnthus Capital 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.