Correlation Between General Dynamics and Supreme Cannabis

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

Diversification Opportunities for General Dynamics and Supreme Cannabis

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between General and Supreme is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and The Supreme Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cannabis and General Dynamics 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 General Dynamics are associated (or correlated) with Supreme Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cannabis has no effect on the direction of General Dynamics i.e., General Dynamics and Supreme Cannabis go up and down completely randomly.

Pair Corralation between General Dynamics and Supreme Cannabis

If you would invest  27,370  in General Dynamics on December 29, 2023 and sell it today you would earn a total of  820.00  from holding General Dynamics or generate 3.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

General Dynamics  vs.  The Supreme Cannabis

 Performance 
       Timeline  
General Dynamics 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in General Dynamics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, General Dynamics may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Supreme Cannabis 

Risk-Adjusted Performance

0 of 100

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

General Dynamics and Supreme Cannabis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Dynamics and Supreme Cannabis

The main advantage of trading using opposite General Dynamics and Supreme Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics position performs unexpectedly, Supreme Cannabis 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 Supreme Cannabis will offset losses from the drop in Supreme Cannabis' long position.
The idea behind General Dynamics and The Supreme Cannabis 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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