Correlation Between Next Generation and Cannabiz Mobile

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

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

Diversification Opportunities for Next Generation and Cannabiz Mobile

0.0

Correlation Coefficient

Next Generation  Cannabiz Mobile

Pay attention - limited upside

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

Pair Corralation between Next Generation and Cannabiz Mobile

Given the investment horizon of 90 days Next Generation is expected to generate 1.13 times less return on investment than Cannabiz Mobile. But when comparing it to its historical volatility, Next Generation Management is 2.1 times less risky than Cannabiz Mobile. It trades about 0.13 of its potential returns per unit of risk. Cannabiz Mobile is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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	98.41%
Values	Daily Returns

Next Generation Management  vs.  Cannabiz Mobile

Next Generation Mana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Next Generation Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Next Generation exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Next Generation and Cannabiz Mobile

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

The idea behind Next Generation Management and Cannabiz Mobile 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.