Correlation Between First Colombia and Smart Cannabis

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

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

Diversification Opportunities for First Colombia and Smart Cannabis

-0.06

Correlation Coefficient

First Colombia  Smart Cannabis

Good diversification

The 3 months correlation between First and Smart is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding First Colombia Gold and Smart Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Cannabis Corp and First Colombia 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 First Colombia Gold are associated (or correlated) with Smart Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Cannabis Corp has no effect on the direction of First Colombia i.e., First Colombia and Smart Cannabis go up and down completely randomly.

Pair Corralation between First Colombia and Smart Cannabis

Given the investment horizon of 90 days First Colombia Gold is expected to generate 14.22 times more return on investment than Smart Cannabis. However, First Colombia is 14.22 times more volatile than Smart Cannabis Corp. It trades about 0.38 of its potential returns per unit of risk. Smart Cannabis Corp is currently generating about 0.08 per unit of risk. If you would invest  0.01  in First Colombia Gold on April 29, 2025 and sell it today you would earn a total of  0.00  from holding First Colombia Gold or generate 0.0% return on investment over 90 days.

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

First Colombia Gold  vs.  Smart Cannabis Corp

First Colombia Gold

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Colombia Gold are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, First Colombia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Smart Cannabis Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Cannabis Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Smart Cannabis sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Colombia and Smart Cannabis

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

The idea behind First Colombia Gold and Smart Cannabis Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.