Correlation Between Cannlabs and Integrated Cannabis

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

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

Diversification Opportunities for Cannlabs and Integrated Cannabis

0.54

Correlation Coefficient

Cannlabs  Integrated Cannabis

Very weak diversification

The 3 months correlation between Cannlabs and Integrated is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cannlabs and Integrated Cannabis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Cannabis and Cannlabs 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 Cannlabs are associated (or correlated) with Integrated Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Cannabis has no effect on the direction of Cannlabs i.e., Cannlabs and Integrated Cannabis go up and down completely randomly.

Pair Corralation between Cannlabs and Integrated Cannabis

If you would invest  0.47  in Integrated Cannabis Solutions on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Integrated Cannabis Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Cannlabs  vs.  Integrated Cannabis Solutions

Cannlabs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cannlabs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak basic indicators, Cannlabs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Integrated Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Cannabis Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cannlabs and Integrated Cannabis

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

The idea behind Cannlabs and Integrated Cannabis Solutions 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.