Correlation Between CbdMD and Altimmune

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

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

Diversification Opportunities for CbdMD and Altimmune

-0.44

Correlation Coefficient

CbdMD  Altimmune

Very good diversification

The 3 months correlation between CbdMD and Altimmune is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Altimmune in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimmune 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 Altimmune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimmune has no effect on the direction of CbdMD i.e., CbdMD and Altimmune go up and down completely randomly.

Pair Corralation between CbdMD and Altimmune

Given the investment horizon of 90 days cbdMD Inc is expected to under-perform the Altimmune. In addition to that, CbdMD is 1.05 times more volatile than Altimmune. It trades about -0.06 of its total potential returns per unit of risk. Altimmune is currently generating about 0.02 per unit of volatility. If you would invest  1,220  in Altimmune on February 23, 2024 and sell it today you would lose (450.00) from holding Altimmune or give up 36.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.58%
Values	Daily Returns

cbdMD Inc  vs.  Altimmune

cbdMD Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in cbdMD Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, CbdMD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Altimmune

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimmune has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Altimmune is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CbdMD and Altimmune

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

The idea behind cbdMD Inc and Altimmune 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.