Correlation Between Im Cannabis and Organon

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

Diversification Opportunities for Im Cannabis and Organon

0.0

Correlation Coefficient

Im Cannabis  Organon

Pay attention - limited upside

The 3 months correlation between IMCC and Organon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Im Cannabis Corp and Organon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organon 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 Organon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organon has no effect on the direction of Im Cannabis i.e., Im Cannabis and Organon go up and down completely randomly.

Pair Corralation between Im Cannabis and Organon

Given the investment horizon of 90 days Im Cannabis Corp is expected to under-perform the Organon. In addition to that, Im Cannabis is 1.55 times more volatile than Organon Co. It trades about -0.03 of its total potential returns per unit of risk. Organon Co is currently generating about 0.08 per unit of volatility. If you would invest  1,418  in Organon Co on December 19, 2024 and sell it today you would earn a total of  161.00  from holding Organon Co or generate 11.35% return on investment over 90 days.

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

Im Cannabis Corp  vs.  Organon Co

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.

Organon

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Organon Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very sluggish technical and fundamental indicators, Organon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Im Cannabis and Organon

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

The idea behind Im Cannabis Corp and Organon Co 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.