Correlation Between IAnthus Capital and For Earth

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

By analyzing existing cross correlation between iAnthus Capital Holdings and For The Earth, you can compare the effects of market volatilities on IAnthus Capital and For Earth 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 IAnthus Capital with a short position of For Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAnthus Capital and For Earth.

Diversification Opportunities for IAnthus Capital and For Earth

-0.36

Correlation Coefficient

IAnthus Capital  For Earth

Very good diversification

The 3 months correlation between IAnthus and For is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding iAnthus Capital Holdings and For The Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on For The Earth and IAnthus Capital 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 iAnthus Capital Holdings are associated (or correlated) with For Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of For The Earth has no effect on the direction of IAnthus Capital i.e., IAnthus Capital and For Earth go up and down completely randomly.

Pair Corralation between IAnthus Capital and For Earth

Assuming the 90 days horizon IAnthus Capital is expected to generate 31.02 times less return on investment than For Earth. But when comparing it to its historical volatility, iAnthus Capital Holdings is 5.33 times less risky than For Earth. It trades about 0.01 of its potential returns per unit of risk. For The Earth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.01  in For The Earth on October 27, 2024 and sell it today you would earn a total of  0.00  from holding For The Earth or generate 0.0% return on investment over 90 days.

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

iAnthus Capital Holdings  vs.  For The Earth

iAnthus Capital Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iAnthus Capital Holdings are ranked lower than 2 (%) 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.

For The Earth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days For The Earth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, For Earth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IAnthus Capital and For Earth

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

The idea behind iAnthus Capital Holdings and For The Earth 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.