Correlation Between Delta 9 and ANI Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Delta 9 and ANI Pharmaceuticals 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 Delta 9 and ANI Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delta 9 Cannabis and ANI Pharmaceuticals, you can compare the effects of market volatilities on Delta 9 and ANI Pharmaceuticals 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 Delta 9 with a short position of ANI Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta 9 and ANI Pharmaceuticals.

Diversification Opportunities for Delta 9 and ANI Pharmaceuticals

0.0

Correlation Coefficient

Delta 9  ANI Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Delta and ANI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta 9 Cannabis and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals and Delta 9 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 Delta 9 Cannabis are associated (or correlated) with ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Delta 9 i.e., Delta 9 and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Delta 9 and ANI Pharmaceuticals

Assuming the 90 days horizon Delta 9 Cannabis is expected to generate 5.58 times more return on investment than ANI Pharmaceuticals. However, Delta 9 is 5.58 times more volatile than ANI Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  2.40  in Delta 9 Cannabis on September 5, 2024 and sell it today you would lose (1.60) from holding Delta 9 Cannabis or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Delta 9 Cannabis  vs.  ANI Pharmaceuticals

Delta 9 Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delta 9 Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Delta 9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ANI Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Delta 9 and ANI Pharmaceuticals

The main advantage of trading using opposite Delta 9 and ANI Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta 9 position performs unexpectedly, ANI Pharmaceuticals 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 ANI Pharmaceuticals will offset losses from the drop in ANI Pharmaceuticals' long position.

The idea behind Delta 9 Cannabis and ANI Pharmaceuticals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.