Correlation Between Video River and Cannlabs

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

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

Diversification Opportunities for Video River and Cannlabs

0.65

Correlation Coefficient

Video River  Cannlabs

Poor diversification

The 3 months correlation between Video and Cannlabs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Video River Networks and Cannlabs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannlabs and Video River 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 Video River Networks are associated (or correlated) with Cannlabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannlabs has no effect on the direction of Video River i.e., Video River and Cannlabs go up and down completely randomly.

Pair Corralation between Video River and Cannlabs

If you would invest  0.25  in Video River Networks on October 10, 2024 and sell it today you would lose (0.01) from holding Video River Networks or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.91%
Values	Daily Returns

Video River Networks  vs.  Cannlabs

Video River Networks

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

Cannlabs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cannlabs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak basic indicators, Cannlabs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Video River and Cannlabs

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

The idea behind Video River Networks and Cannlabs 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.