Correlation Between IAnthus Capital and Im Cannabis

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

Diversification Opportunities for IAnthus Capital and Im Cannabis

-0.43

Correlation Coefficient

IAnthus Capital  Im Cannabis

Very good diversification

The 3 months correlation between IAnthus and IMCC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding iAnthus Capital Holdings and Im Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Im Cannabis Corp 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 Im Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Im Cannabis Corp has no effect on the direction of IAnthus Capital i.e., IAnthus Capital and Im Cannabis go up and down completely randomly.

Pair Corralation between IAnthus Capital and Im Cannabis

Assuming the 90 days horizon iAnthus Capital Holdings is expected to generate 1.28 times more return on investment than Im Cannabis. However, IAnthus Capital is 1.28 times more volatile than Im Cannabis Corp. It trades about 0.03 of its potential returns per unit of risk. Im Cannabis Corp is currently generating about 0.01 per unit of risk. If you would invest  2.00  in iAnthus Capital Holdings on October 12, 2024 and sell it today you would lose (1.40) from holding iAnthus Capital Holdings or give up 70.0% of portfolio value over 90 days.

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

iAnthus Capital Holdings  vs.  Im Cannabis Corp

iAnthus Capital Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Im Cannabis Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Im Cannabis Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Im Cannabis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IAnthus Capital and Im Cannabis

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

The idea behind iAnthus Capital Holdings and Im Cannabis 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.