Correlation Between Indoor Harvest and CanaQuest Medical

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

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

Diversification Opportunities for Indoor Harvest and CanaQuest Medical

0.0

Correlation Coefficient

Indoor Harvest  CanaQuest Medical

Pay attention - limited upside

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

Pair Corralation between Indoor Harvest and CanaQuest Medical

If you would invest  4.77  in CanaQuest Medical Corp on September 3, 2024 and sell it today you would lose (1.77) from holding CanaQuest Medical Corp or give up 37.11% of portfolio value over 90 days.

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

Indoor Harvest Corp  vs.  CanaQuest Medical Corp

Indoor Harvest Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indoor Harvest Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Indoor Harvest is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CanaQuest Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CanaQuest Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CanaQuest Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Indoor Harvest and CanaQuest Medical

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

The idea behind Indoor Harvest Corp and CanaQuest Medical Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.