Correlation Between Global Cannabis and Visium Technologies

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

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

Diversification Opportunities for Global Cannabis and Visium Technologies

0.55

Correlation Coefficient

Global Cannabis  Visium Technologies

Very weak diversification

The 3 months correlation between Global and Visium is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Cannabis Applications and Visium Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visium Technologies and Global 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 Global Cannabis Applications are associated (or correlated) with Visium Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visium Technologies has no effect on the direction of Global Cannabis i.e., Global Cannabis and Visium Technologies go up and down completely randomly.

Pair Corralation between Global Cannabis and Visium Technologies

Assuming the 90 days horizon Global Cannabis Applications is expected to generate 2.43 times more return on investment than Visium Technologies. However, Global Cannabis is 2.43 times more volatile than Visium Technologies. It trades about -0.01 of its potential returns per unit of risk. Visium Technologies is currently generating about -0.13 per unit of risk. If you would invest  1.34  in Global Cannabis Applications on February 23, 2024 and sell it today you would lose (0.55) from holding Global Cannabis Applications or give up 41.04% of portfolio value over 90 days.

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

Global Cannabis Applications  vs.  Visium Technologies

Global Cannabis Appl

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Cannabis Applications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Global Cannabis reported solid returns over the last few months and may actually be approaching a breakup point.

Visium Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visium Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Global Cannabis and Visium Technologies

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

The idea behind Global Cannabis Applications and Visium 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.