Correlation Between Global Cannabis and Repay Holdings

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

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

Diversification Opportunities for Global Cannabis and Repay Holdings

0.03

Correlation Coefficient

Global Cannabis  Repay Holdings

Significant diversification

The 3 months correlation between Global and Repay is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global Cannabis Applications and Repay Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repay Holdings Corp and Global 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 Global Cannabis Applications are associated (or correlated) with Repay Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repay Holdings Corp has no effect on the direction of Global Cannabis i.e., Global Cannabis and Repay Holdings go up and down completely randomly.

Pair Corralation between Global Cannabis and Repay Holdings

Assuming the 90 days horizon Global Cannabis Applications is expected to generate 6.41 times more return on investment than Repay Holdings. However, Global Cannabis is 6.41 times more volatile than Repay Holdings Corp. It trades about 0.1 of its potential returns per unit of risk. Repay Holdings Corp is currently generating about -0.04 per unit of risk. If you would invest  0.30  in Global Cannabis Applications on September 23, 2024 and sell it today you would earn a total of  0.10  from holding Global Cannabis Applications or generate 33.33% return on investment over 90 days.

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

Global Cannabis Applications  vs.  Repay Holdings Corp

Global Cannabis Appl

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Cannabis Applications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Global Cannabis reported solid returns over the last few months and may actually be approaching a breakup point.

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Global Cannabis and Repay Holdings

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

The idea behind Global Cannabis Applications and Repay Holdings Corp 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.