Correlation Between CbdMD and Cannabis Suisse

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

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

Diversification Opportunities for CbdMD and Cannabis Suisse

0.42

Correlation Coefficient

CbdMD  Cannabis Suisse

Very weak diversification

The 3 months correlation between CbdMD and Cannabis is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Cannabis Suisse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Suisse Corp and CbdMD 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 cbdMD Inc are associated (or correlated) with Cannabis Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Suisse Corp has no effect on the direction of CbdMD i.e., CbdMD and Cannabis Suisse go up and down completely randomly.

Pair Corralation between CbdMD and Cannabis Suisse

Given the investment horizon of 90 days cbdMD Inc is expected to under-perform the Cannabis Suisse. But the stock apears to be less risky and, when comparing its historical volatility, cbdMD Inc is 4.39 times less risky than Cannabis Suisse. The stock trades about -0.04 of its potential returns per unit of risk. The Cannabis Suisse Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.30  in Cannabis Suisse Corp on December 29, 2024 and sell it today you would earn a total of  0.50  from holding Cannabis Suisse Corp or generate 38.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

cbdMD Inc  vs.  Cannabis Suisse Corp

cbdMD Inc

Risk-Adjusted Performance

Very Weak

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

Cannabis Suisse Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Suisse Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Cannabis Suisse demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CbdMD and Cannabis Suisse

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

The idea behind cbdMD Inc and Cannabis Suisse 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..