Correlation Between CB Scientific and Cannlabs

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

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

Diversification Opportunities for CB Scientific and Cannlabs

0.0

Correlation Coefficient

CB Scientific  Cannlabs

Pay attention - limited upside

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

Pair Corralation between CB Scientific and Cannlabs

If you would invest  3.90  in CB Scientific on May 8, 2025 and sell it today you would lose (0.10) from holding CB Scientific or give up 2.56% of portfolio value over 90 days.

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

CB Scientific  vs.  Cannlabs

CB Scientific

Risk-Adjusted Performance

Weak

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

Cannlabs

Risk-Adjusted Performance

Weakest

Over the last 90 days Cannlabs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cannlabs is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CB Scientific and Cannlabs

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

The idea behind CB Scientific and Cannlabs 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.