Correlation Between CbdMD and Cannabis Strategic

Can any of the company-specific risk be diversified away by investing in both CbdMD and Cannabis Strategic 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 Strategic 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 Strategic Ventures, you can compare the effects of market volatilities on CbdMD and Cannabis Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Cannabis Strategic.

Diversification Opportunities for CbdMD and Cannabis Strategic

0.0

Correlation Coefficient

CbdMD  Cannabis Strategic

Pay attention - limited upside

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

Pair Corralation between CbdMD and Cannabis Strategic

If you would invest  0.01  in Cannabis Strategic Ventures on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Cannabis Strategic Ventures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

cbdMD Inc  vs.  Cannabis Strategic Ventures

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 Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cannabis Strategic Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Cannabis Strategic is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CbdMD and Cannabis Strategic

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

The idea behind cbdMD Inc and Cannabis Strategic Ventures 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.