Correlation Between Oxford Cannabinoid and Nova Mentis

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

By analyzing existing cross correlation between Oxford Cannabinoid Technologies and Nova Mentis Life, you can compare the effects of market volatilities on Oxford Cannabinoid and Nova Mentis 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 Oxford Cannabinoid with a short position of Nova Mentis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Cannabinoid and Nova Mentis.

Diversification Opportunities for Oxford Cannabinoid and Nova Mentis

0.0

Correlation Coefficient

Oxford Cannabinoid  Nova Mentis

Pay attention - limited upside

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

Pair Corralation between Oxford Cannabinoid and Nova Mentis

If you would invest  3.57  in Nova Mentis Life on December 25, 2024 and sell it today you would earn a total of  1.78  from holding Nova Mentis Life or generate 49.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.83%
Values	Daily Returns

Oxford Cannabinoid Technologie  vs.  Nova Mentis Life

Oxford Cannabinoid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Cannabinoid Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Oxford Cannabinoid is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nova Mentis Life

Risk-Adjusted Performance

Good

Over the last 90 days Nova Mentis Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Nova Mentis reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oxford Cannabinoid and Nova Mentis

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

The idea behind Oxford Cannabinoid Technologies and Nova Mentis Life 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.