Correlation Between MegaLong Canadian and InMed Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both MegaLong Canadian and InMed Pharmaceuticals 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 MegaLong Canadian and InMed Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MegaLong Canadian Banks and InMed Pharmaceuticals, you can compare the effects of market volatilities on MegaLong Canadian and InMed Pharmaceuticals 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 MegaLong Canadian with a short position of InMed Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MegaLong Canadian and InMed Pharmaceuticals.
Diversification Opportunities for MegaLong Canadian and InMed Pharmaceuticals
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MegaLong and InMed is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding MegaLong Canadian Banks and InMed Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMed Pharmaceuticals and MegaLong Canadian 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 MegaLong Canadian Banks are associated (or correlated) with InMed Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMed Pharmaceuticals has no effect on the direction of MegaLong Canadian i.e., MegaLong Canadian and InMed Pharmaceuticals go up and down completely randomly.
Pair Corralation between MegaLong Canadian and InMed Pharmaceuticals
Assuming the 90 days trading horizon MegaLong Canadian Banks is expected to generate 0.4 times more return on investment than InMed Pharmaceuticals. However, MegaLong Canadian Banks is 2.53 times less risky than InMed Pharmaceuticals. It trades about 0.27 of its potential returns per unit of risk. InMed Pharmaceuticals is currently generating about -0.13 per unit of risk. If you would invest 2,951 in MegaLong Canadian Banks on September 5, 2025 and sell it today you would earn a total of 1,052 from holding MegaLong Canadian Banks or generate 35.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MegaLong Canadian Banks vs. InMed Pharmaceuticals
Performance |
| Timeline |
| MegaLong Canadian Banks |
| InMed Pharmaceuticals |
MegaLong Canadian and InMed Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MegaLong Canadian and InMed Pharmaceuticals
The main advantage of trading using opposite MegaLong Canadian and InMed Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MegaLong Canadian position performs unexpectedly, InMed Pharmaceuticals 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 InMed Pharmaceuticals will offset losses from the drop in InMed Pharmaceuticals' long position.| MegaLong Canadian vs. MegaLong Semiconductors Daily | MegaLong Canadian vs. MegaLong 20 Year | MegaLong Canadian vs. MegaLong Canadian Gold | MegaLong Canadian vs. MegaLong SP 500 |
| InMed Pharmaceuticals vs. Electronic Arts | InMed Pharmaceuticals vs. Shanghai Fudan Microelectronics | InMed Pharmaceuticals vs. Accel Entertainment | InMed Pharmaceuticals vs. Kimball Electronics |
Check out your portfolio center.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.
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