Correlation Between Cansortium and Grown Rogue

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

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

Diversification Opportunities for Cansortium and Grown Rogue

0.01

Correlation Coefficient

Cansortium  Grown Rogue

Significant diversification

The 3 months correlation between Cansortium and Grown is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cansortium and Grown Rogue International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grown Rogue International and Cansortium 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 Cansortium are associated (or correlated) with Grown Rogue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grown Rogue International has no effect on the direction of Cansortium i.e., Cansortium and Grown Rogue go up and down completely randomly.

Pair Corralation between Cansortium and Grown Rogue

Assuming the 90 days horizon Cansortium is expected to under-perform the Grown Rogue. In addition to that, Cansortium is 2.19 times more volatile than Grown Rogue International. It trades about -0.02 of its total potential returns per unit of risk. Grown Rogue International is currently generating about 0.05 per unit of volatility. If you would invest  62.00  in Grown Rogue International on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Grown Rogue International or generate 8.06% return on investment over 90 days.

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

Cansortium  vs.  Grown Rogue International

Cansortium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cansortium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Grown Rogue International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grown Rogue International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Grown Rogue may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cansortium and Grown Rogue

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

The idea behind Cansortium and Grown Rogue International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.