Correlation Between Juva Life and Cannabis Suisse

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Can any of the company-specific risk be diversified away by investing in both Juva Life and Cannabis Suisse 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 Juva Life and Cannabis Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juva Life and Cannabis Suisse Corp, you can compare the effects of market volatilities on Juva Life and Cannabis Suisse 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 Juva Life with a short position of Cannabis Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juva Life and Cannabis Suisse.

Diversification Opportunities for Juva Life and Cannabis Suisse

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Juva and Cannabis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Juva Life and Cannabis Suisse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabis Suisse Corp and Juva Life 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 Juva Life are associated (or correlated) with Cannabis Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabis Suisse Corp has no effect on the direction of Juva Life i.e., Juva Life and Cannabis Suisse go up and down completely randomly.

Pair Corralation between Juva Life and Cannabis Suisse

Assuming the 90 days horizon Juva Life is expected to generate 3.83 times more return on investment than Cannabis Suisse. However, Juva Life is 3.83 times more volatile than Cannabis Suisse Corp. It trades about 0.14 of its potential returns per unit of risk. Cannabis Suisse Corp is currently generating about 0.09 per unit of risk. If you would invest  9.00  in Juva Life on September 6, 2024 and sell it today you would lose (8.99) from holding Juva Life or give up 99.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Juva Life  vs.  Cannabis Suisse Corp

 Performance 
       Timeline  
Juva Life 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Juva Life are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Juva Life reported solid returns over the last few months and may actually be approaching a breakup point.
Cannabis Suisse Corp 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Cannabis Suisse Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Cannabis Suisse demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Juva Life and Cannabis Suisse Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Juva Life and Cannabis Suisse

The main advantage of trading using opposite Juva Life and Cannabis Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juva Life position performs unexpectedly, Cannabis Suisse 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 Cannabis Suisse will offset losses from the drop in Cannabis Suisse's long position.
The idea behind Juva Life and Cannabis Suisse 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.
Check out your portfolio center.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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