Correlation Between CordovaCann Corp and Newtopia

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

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

Diversification Opportunities for CordovaCann Corp and Newtopia

0.02

Correlation Coefficient

CordovaCann Corp  Newtopia

Significant diversification

The 3 months correlation between CordovaCann and Newtopia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CordovaCann Corp and Newtopia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtopia and CordovaCann Corp 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 CordovaCann Corp are associated (or correlated) with Newtopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtopia has no effect on the direction of CordovaCann Corp i.e., CordovaCann Corp and Newtopia go up and down completely randomly.

Pair Corralation between CordovaCann Corp and Newtopia

Assuming the 90 days horizon CordovaCann Corp is expected to generate 43.69 times less return on investment than Newtopia. But when comparing it to its historical volatility, CordovaCann Corp is 7.85 times less risky than Newtopia. It trades about 0.02 of its potential returns per unit of risk. Newtopia is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Newtopia on May 7, 2025 and sell it today you would earn a total of  0.06  from holding Newtopia or generate 120.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

CordovaCann Corp  vs.  Newtopia

CordovaCann Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CordovaCann Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, CordovaCann Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Newtopia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newtopia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Newtopia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CordovaCann Corp and Newtopia

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

The idea behind CordovaCann Corp and Newtopia 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.