Correlation Between General Cannabis and Weed

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

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

Diversification Opportunities for General Cannabis and Weed

-0.09

Correlation Coefficient

General Cannabis  Weed

Good diversification

The 3 months correlation between General and Weed is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Cannabis Corp and Weed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weed Inc and General 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 General Cannabis Corp are associated (or correlated) with Weed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weed Inc has no effect on the direction of General Cannabis i.e., General Cannabis and Weed go up and down completely randomly.

Pair Corralation between General Cannabis and Weed

Given the investment horizon of 90 days General Cannabis is expected to generate 1.44 times less return on investment than Weed. But when comparing it to its historical volatility, General Cannabis Corp is 1.19 times less risky than Weed. It trades about 0.03 of its potential returns per unit of risk. Weed Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7.38  in Weed Inc on September 6, 2025 and sell it today you would lose (3.38) from holding Weed Inc or give up 45.8% of portfolio value over 90 days.

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

General Cannabis Corp  vs.  Weed Inc

General Cannabis Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days General Cannabis Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, General Cannabis is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Weed Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Weed Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Weed showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with General Cannabis and Weed

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

The idea behind General Cannabis Corp and Weed 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.