Correlation Between CordovaCann Corp and PureBase Corp

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

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

Diversification Opportunities for CordovaCann Corp and PureBase Corp

0.32

Correlation Coefficient

CordovaCann Corp  PureBase Corp

Weak diversification

The 3 months correlation between CordovaCann and PureBase is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CordovaCann Corp and PureBase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PureBase Corp 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 PureBase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PureBase Corp has no effect on the direction of CordovaCann Corp i.e., CordovaCann Corp and PureBase Corp go up and down completely randomly.

Pair Corralation between CordovaCann Corp and PureBase Corp

Assuming the 90 days horizon CordovaCann Corp is expected to generate 4.92 times less return on investment than PureBase Corp. But when comparing it to its historical volatility, CordovaCann Corp is 1.56 times less risky than PureBase Corp. It trades about 0.03 of its potential returns per unit of risk. PureBase Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7.50  in PureBase Corp on May 5, 2025 and sell it today you would lose (0.50) from holding PureBase Corp or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CordovaCann Corp  vs.  PureBase Corp

CordovaCann Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CordovaCann Corp are ranked lower than 2 (%) 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.

PureBase Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PureBase Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, PureBase Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CordovaCann Corp and PureBase Corp

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

The idea behind CordovaCann Corp and PureBase 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.