Correlation Between Greater Cannabis and Careview Comm

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

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

Diversification Opportunities for Greater Cannabis and Careview Comm

0.37

Correlation Coefficient

Greater Cannabis  Careview Comm

Weak diversification

The 3 months correlation between Greater and Careview is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Greater Cannabis and Careview Comm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careview Comm and Greater 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 Greater Cannabis are associated (or correlated) with Careview Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careview Comm has no effect on the direction of Greater Cannabis i.e., Greater Cannabis and Careview Comm go up and down completely randomly.

Pair Corralation between Greater Cannabis and Careview Comm

Given the investment horizon of 90 days Greater Cannabis is expected to under-perform the Careview Comm. In addition to that, Greater Cannabis is 1.03 times more volatile than Careview Comm. It trades about 0.0 of its total potential returns per unit of risk. Careview Comm is currently generating about 0.03 per unit of volatility. If you would invest  5.00  in Careview Comm on September 14, 2024 and sell it today you would lose (1.00) from holding Careview Comm or give up 20.0% of portfolio value over 90 days.

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

Greater Cannabis  vs.  Careview Comm

Greater Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greater Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Greater Cannabis is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Careview Comm

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Careview Comm are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Careview Comm showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greater Cannabis and Careview Comm

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

The idea behind Greater Cannabis and Careview Comm 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.