Correlation Between Cannabiz Mobile and Caf Serendipity

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

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

Diversification Opportunities for Cannabiz Mobile and Caf Serendipity

0.0

Correlation Coefficient

Cannabiz Mobile  Caf Serendipity

Pay attention - limited upside

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

Pair Corralation between Cannabiz Mobile and Caf Serendipity

Given the investment horizon of 90 days Cannabiz Mobile is expected to generate 7.52 times more return on investment than Caf Serendipity. However, Cannabiz Mobile is 7.52 times more volatile than Caf Serendipity Holdings. It trades about 0.07 of its potential returns per unit of risk. Caf Serendipity Holdings is currently generating about 0.01 per unit of risk. If you would invest  0.01  in Cannabiz Mobile on September 17, 2024 and sell it today you would lose (0.01) from holding Cannabiz Mobile or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Cannabiz Mobile  vs.  Caf Serendipity Holdings

Cannabiz Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cannabiz Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Cannabiz Mobile is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Caf Serendipity Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caf Serendipity Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Caf Serendipity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cannabiz Mobile and Caf Serendipity

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

The idea behind Cannabiz Mobile and Caf Serendipity Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.