Correlation Between CordovaCann Corp and Pure Extracts

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

By analyzing existing cross correlation between CordovaCann Corp and Pure Extracts Technologies, you can compare the effects of market volatilities on CordovaCann Corp and Pure Extracts 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 CordovaCann Corp with a short position of Pure Extracts. Check out your portfolio center. Please also check ongoing floating volatility patterns of CordovaCann Corp and Pure Extracts.

Diversification Opportunities for CordovaCann Corp and Pure Extracts

0.57

Correlation Coefficient

CordovaCann Corp  Pure Extracts

Very weak diversification

The 3 months correlation between CordovaCann and Pure is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CordovaCann Corp and Pure Extracts Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Extracts Techno and CordovaCann Corp 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 CordovaCann Corp are associated (or correlated) with Pure Extracts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Extracts Techno has no effect on the direction of CordovaCann Corp i.e., CordovaCann Corp and Pure Extracts go up and down completely randomly.

Pair Corralation between CordovaCann Corp and Pure Extracts

If you would invest  11.00  in CordovaCann Corp on September 14, 2024 and sell it today you would lose (6.30) from holding CordovaCann Corp or give up 57.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.4%
Values	Daily Returns

CordovaCann Corp  vs.  Pure Extracts Technologies

CordovaCann Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CordovaCann Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, CordovaCann Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pure Extracts Techno

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CordovaCann Corp and Pure Extracts

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

The idea behind CordovaCann Corp and Pure Extracts Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.