Correlation Between Medical Cannabis and Healthcare Integrated

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Can any of the company-specific risk be diversified away by investing in both Medical Cannabis and Healthcare Integrated 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 Medical Cannabis and Healthcare Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Cannabis Pay and Healthcare Integrated Technologies, you can compare the effects of market volatilities on Medical Cannabis and Healthcare Integrated 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 Medical Cannabis with a short position of Healthcare Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Cannabis and Healthcare Integrated.

Diversification Opportunities for Medical Cannabis and Healthcare Integrated

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Medical and Healthcare is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Medical Cannabis Pay and Healthcare Integrated Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Integrated and Medical Cannabis 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 Medical Cannabis Pay are associated (or correlated) with Healthcare Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Integrated has no effect on the direction of Medical Cannabis i.e., Medical Cannabis and Healthcare Integrated go up and down completely randomly.

Pair Corralation between Medical Cannabis and Healthcare Integrated

Given the investment horizon of 90 days Medical Cannabis Pay is expected to generate 20.06 times more return on investment than Healthcare Integrated. However, Medical Cannabis is 20.06 times more volatile than Healthcare Integrated Technologies. It trades about 0.22 of its potential returns per unit of risk. Healthcare Integrated Technologies is currently generating about 0.07 per unit of risk. If you would invest  0.15  in Medical Cannabis Pay on September 6, 2024 and sell it today you would lose (0.14) from holding Medical Cannabis Pay or give up 93.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.66%
ValuesDaily Returns

Medical Cannabis Pay  vs.  Healthcare Integrated Technolo

 Performance 
       Timeline  
Medical Cannabis Pay 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Medical Cannabis Pay are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Medical Cannabis reported solid returns over the last few months and may actually be approaching a breakup point.
Healthcare Integrated 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Integrated Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Healthcare Integrated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Medical Cannabis and Healthcare Integrated Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Medical Cannabis and Healthcare Integrated

The main advantage of trading using opposite Medical Cannabis and Healthcare Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Cannabis position performs unexpectedly, Healthcare Integrated 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 Healthcare Integrated will offset losses from the drop in Healthcare Integrated's long position.
The idea behind Medical Cannabis Pay and Healthcare Integrated Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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