Correlation Between YourWay Cannabis and Procyon

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

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

Diversification Opportunities for YourWay Cannabis and Procyon

0.0

Correlation Coefficient

YourWay Cannabis  Procyon

Pay attention - limited upside

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

Pair Corralation between YourWay Cannabis and Procyon

Assuming the 90 days horizon YourWay Cannabis Brands is expected to generate 12.7 times more return on investment than Procyon. However, YourWay Cannabis is 12.7 times more volatile than Procyon. It trades about 0.07 of its potential returns per unit of risk. Procyon is currently generating about 0.03 per unit of risk. If you would invest  2.90  in YourWay Cannabis Brands on September 29, 2024 and sell it today you would lose (2.90) from holding YourWay Cannabis Brands or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

YourWay Cannabis Brands  vs.  Procyon

YourWay Cannabis Brands

Risk-Adjusted Performance

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Very Weak

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

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procyon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Procyon is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with YourWay Cannabis and Procyon

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

The idea behind YourWay Cannabis Brands and Procyon 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.