Correlation Between CordovaCann Corp and Agra Ventures

Can any of the company-specific risk be diversified away by investing in both CordovaCann Corp and Agra Ventures 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 CordovaCann Corp and Agra Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for CordovaCann Corp and Agra Ventures

0.09

Correlation Coefficient

CordovaCann Corp  Agra Ventures

Significant diversification

The 3 months correlation between CordovaCann and Agra is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CordovaCann Corp and Agra Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agra Ventures and CordovaCann Corp 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 CordovaCann Corp are associated (or correlated) with Agra Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agra Ventures has no effect on the direction of CordovaCann Corp i.e., CordovaCann Corp and Agra Ventures go up and down completely randomly.

Pair Corralation between CordovaCann Corp and Agra Ventures

Assuming the 90 days horizon CordovaCann Corp is expected to generate 2.18 times more return on investment than Agra Ventures. However, CordovaCann Corp is 2.18 times more volatile than Agra Ventures. It trades about 0.09 of its potential returns per unit of risk. Agra Ventures is currently generating about 0.1 per unit of risk. If you would invest  6.00  in CordovaCann Corp on September 3, 2024 and sell it today you would earn a total of  0.60  from holding CordovaCann Corp or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

CordovaCann Corp  vs.  Agra Ventures

CordovaCann Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CordovaCann Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, CordovaCann Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Agra Ventures

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agra Ventures are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Agra Ventures reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CordovaCann Corp and Agra Ventures

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

The idea behind CordovaCann Corp and Agra 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.