Correlation Between CannTrust Holdings and Acreage Holdings

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

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

Diversification Opportunities for CannTrust Holdings and Acreage Holdings

0.27

Correlation Coefficient

CannTrust Holdings  Acreage Holdings

Modest diversification

The 3 months correlation between CannTrust and Acreage is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CannTrust Holdings and Acreage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acreage Holdings and CannTrust Holdings 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 CannTrust Holdings are associated (or correlated) with Acreage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acreage Holdings has no effect on the direction of CannTrust Holdings i.e., CannTrust Holdings and Acreage Holdings go up and down completely randomly.

Pair Corralation between CannTrust Holdings and Acreage Holdings

If you would invest  0.01  in CannTrust Holdings on September 19, 2024 and sell it today you would earn a total of  0.00  from holding CannTrust Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	6.25%
Values	Daily Returns

CannTrust Holdings  vs.  Acreage Holdings

CannTrust Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CannTrust Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CannTrust Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Acreage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CannTrust Holdings and Acreage Holdings

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

The idea behind CannTrust Holdings and Acreage Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.