Correlation Between Greater Cannabis and Cytta Corp

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

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

Diversification Opportunities for Greater Cannabis and Cytta Corp

0.34

Correlation Coefficient

Greater Cannabis  Cytta Corp

Weak diversification

The 3 months correlation between Greater and Cytta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Greater Cannabis and Cytta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytta Corp 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 Cytta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytta Corp has no effect on the direction of Greater Cannabis i.e., Greater Cannabis and Cytta Corp go up and down completely randomly.

Pair Corralation between Greater Cannabis and Cytta Corp

Given the investment horizon of 90 days Greater Cannabis is expected to generate 2.66 times less return on investment than Cytta Corp. In addition to that, Greater Cannabis is 1.34 times more volatile than Cytta Corp. It trades about 0.01 of its total potential returns per unit of risk. Cytta Corp is currently generating about 0.03 per unit of volatility. If you would invest  2.50  in Cytta Corp on September 18, 2024 and sell it today you would lose (0.25) from holding Cytta Corp or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Greater Cannabis  vs.  Cytta Corp

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.

Cytta Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cytta Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Cytta Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greater Cannabis and Cytta Corp

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

The idea behind Greater Cannabis and Cytta 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .