Correlation Between Marijuana Company and Sugarmade

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

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

Diversification Opportunities for Marijuana Company and Sugarmade

0.0

Correlation Coefficient

Marijuana Company  Sugarmade

Pay attention - limited upside

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

Pair Corralation between Marijuana Company and Sugarmade

If you would invest  0.01  in Sugarmade on December 23, 2024 and sell it today you would earn a total of  0.02  from holding Sugarmade or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	76.67%
Values	Daily Returns

Marijuana  vs.  Sugarmade

Marijuana Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marijuana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Marijuana Company is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sugarmade

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sugarmade are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Sugarmade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marijuana Company and Sugarmade

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

The idea behind Marijuana and Sugarmade 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.