Correlation Between CbdMD and Agenus

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

By analyzing existing cross correlation between cbdMD Inc and Agenus Inc, you can compare the effects of market volatilities on CbdMD and Agenus 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 CbdMD with a short position of Agenus. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Agenus.

Diversification Opportunities for CbdMD and Agenus

-0.7

Correlation Coefficient

CbdMD  Agenus

Excellent diversification

The 3 months correlation between CbdMD and Agenus is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Agenus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agenus Inc and CbdMD 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 cbdMD Inc are associated (or correlated) with Agenus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agenus Inc has no effect on the direction of CbdMD i.e., CbdMD and Agenus go up and down completely randomly.

Pair Corralation between CbdMD and Agenus

Given the investment horizon of 90 days cbdMD Inc is expected to under-perform the Agenus. But the stock apears to be less risky and, when comparing its historical volatility, cbdMD Inc is 43.86 times less risky than Agenus. The stock trades about -0.07 of its potential returns per unit of risk. The Agenus Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  3,611  in Agenus Inc on March 19, 2024 and sell it today you would lose (2,065) from holding Agenus Inc or give up 57.19% of portfolio value over 90 days.

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

cbdMD Inc  vs.  Agenus Inc

cbdMD Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days cbdMD Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, CbdMD is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Agenus Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agenus Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Agenus displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CbdMD and Agenus

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

The idea behind cbdMD Inc and Agenus Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..