Correlation Between Speakeasy Cannabis and Allied Corp

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

By analyzing existing cross correlation between Speakeasy Cannabis Club and Allied Corp, you can compare the effects of market volatilities on Speakeasy Cannabis and Allied Corp 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 Speakeasy Cannabis with a short position of Allied Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speakeasy Cannabis and Allied Corp.

Diversification Opportunities for Speakeasy Cannabis and Allied Corp

0.0

Correlation Coefficient

Speakeasy Cannabis  Allied Corp

Pay attention - limited upside

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

Pair Corralation between Speakeasy Cannabis and Allied Corp

If you would invest  16.00  in Allied Corp on October 8, 2024 and sell it today you would lose (12.66) from holding Allied Corp or give up 79.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.65%
Values	Daily Returns

Speakeasy Cannabis Club  vs.  Allied Corp

Speakeasy Cannabis Club

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allied Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allied Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Speakeasy Cannabis and Allied Corp

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

The idea behind Speakeasy Cannabis Club and Allied Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.