Correlation Between Khiron Life and Cannabis Strategic

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

By analyzing existing cross correlation between Khiron Life Sciences and Cannabis Strategic Ventures, you can compare the effects of market volatilities on Khiron Life and Cannabis Strategic 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 Khiron Life with a short position of Cannabis Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Cannabis Strategic.

Diversification Opportunities for Khiron Life and Cannabis Strategic

0.18

Correlation Coefficient

Khiron Life  Cannabis Strategic

Average diversification

The 3 months correlation between Khiron and Cannabis is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Cannabis Strategic Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Strategic and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with Cannabis Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Strategic has no effect on the direction of Khiron Life i.e., Khiron Life and Cannabis Strategic go up and down completely randomly.

Pair Corralation between Khiron Life and Cannabis Strategic

Assuming the 90 days horizon Khiron Life is expected to generate 3.18 times less return on investment than Cannabis Strategic. But when comparing it to its historical volatility, Khiron Life Sciences is 1.68 times less risky than Cannabis Strategic. It trades about 0.15 of its potential returns per unit of risk. Cannabis Strategic Ventures is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cannabis Strategic Ventures on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Cannabis Strategic Ventures or generate 0.0% return on investment over 90 days.

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

Khiron Life Sciences  vs.  Cannabis Strategic Ventures

Khiron Life Sciences

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Khiron Life Sciences are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Khiron Life reported solid returns over the last few months and may actually be approaching a breakup point.

Cannabis Strategic

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Strategic Ventures are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Cannabis Strategic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Khiron Life and Cannabis Strategic

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

The idea behind Khiron Life Sciences and Cannabis Strategic Ventures 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.