Correlation Between Shuttle Pharmaceuticals and C21 Investments

Can any of the company-specific risk be diversified away by investing in both Shuttle Pharmaceuticals and C21 Investments 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 Shuttle Pharmaceuticals and C21 Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shuttle Pharmaceuticals and C21 Investments, you can compare the effects of market volatilities on Shuttle Pharmaceuticals and C21 Investments 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 Shuttle Pharmaceuticals with a short position of C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuttle Pharmaceuticals and C21 Investments.

Diversification Opportunities for Shuttle Pharmaceuticals and C21 Investments

0.33

Correlation Coefficient

Shuttle Pharmaceuticals  C21 Investments

Weak diversification

The 3 months correlation between Shuttle and C21 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shuttle Pharmaceuticals and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals are associated (or correlated) with C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of Shuttle Pharmaceuticals i.e., Shuttle Pharmaceuticals and C21 Investments go up and down completely randomly.

Pair Corralation between Shuttle Pharmaceuticals and C21 Investments

Given the investment horizon of 90 days Shuttle Pharmaceuticals is expected to generate 1.19 times more return on investment than C21 Investments. However, Shuttle Pharmaceuticals is 1.19 times more volatile than C21 Investments. It trades about 0.14 of its potential returns per unit of risk. C21 Investments is currently generating about -0.12 per unit of risk. If you would invest  75.00  in Shuttle Pharmaceuticals on October 11, 2024 and sell it today you would earn a total of  11.00  from holding Shuttle Pharmaceuticals or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Shuttle Pharmaceuticals  vs.  C21 Investments

Shuttle Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shuttle Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

C21 Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C21 Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, C21 Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Shuttle Pharmaceuticals and C21 Investments

The main advantage of trading using opposite Shuttle Pharmaceuticals and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuttle Pharmaceuticals position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' long position.

The idea behind Shuttle Pharmaceuticals and C21 Investments 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.