Correlation Between Intercure and Cannassure Therapeutics

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

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

Diversification Opportunities for Intercure and Cannassure Therapeutics

-0.47

Correlation Coefficient

Intercure  Cannassure Therapeutics

Very good diversification

The 3 months correlation between Intercure and Cannassure is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and Cannassure Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannassure Therapeutics and Intercure 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 Intercure are associated (or correlated) with Cannassure Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannassure Therapeutics has no effect on the direction of Intercure i.e., Intercure and Cannassure Therapeutics go up and down completely randomly.

Pair Corralation between Intercure and Cannassure Therapeutics

Assuming the 90 days trading horizon Intercure is expected to under-perform the Cannassure Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Intercure is 1.8 times less risky than Cannassure Therapeutics. The stock trades about -0.03 of its potential returns per unit of risk. The Cannassure Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  80,000  in Cannassure Therapeutics on December 30, 2024 and sell it today you would lose (5,120) from holding Cannassure Therapeutics or give up 6.4% of portfolio value over 90 days.

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

Intercure  vs.  Cannassure Therapeutics

Intercure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intercure is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cannassure Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cannassure Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cannassure Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intercure and Cannassure Therapeutics

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

The idea behind Intercure and Cannassure Therapeutics 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.