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Breaking bad: An investment in cannabis

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  • Weisskopf, Jean-Philippe

Abstract

This paper investigates the risk and return features of an investment in the cannabis industry. It further describes the current state of the market for cannabis and critically examines its potential future development. Findings show that a portfolio of cannabis stocks displays high volatilities and returns, but also low correlations and beta coefficients with regard to overall stock markets, other sin industries or cryptocurrencies. This makes it an interesting addition to financial portfolios.

Suggested Citation

  • Weisskopf, Jean-Philippe, 2020. "Breaking bad: An investment in cannabis," Finance Research Letters, Elsevier, vol. 33(C).
    • Handle: RePEc:eee:finlet:v:33:y:2020:i:c:s1544612318309383
    DOI: 10.1016/j.frl.2019.05.019
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    Cited by:

    1. Chen, Feilong & Choi, Sungchul & Fu, Chengbo & Nycholat, Joshua, 2021. "Too high to get it right: The effect of cannabis legalization on the performance of cannabis-related stocks," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 715-734.
    2. Andrikopoulos, Panagiotis & Gebka, Bartosz & Kallinterakis, Vasileios, 2021. "Regulatory mood-congruence and herding: Evidence from cannabis stocks," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 842-864.
    3. Pedro Antonio Martín-Cervantes & María del Carmen Valls Martínez, 2023. "Unraveling the relationship between betas and ESG scores through the Random Forests methodology," Risk Management, Palgrave Macmillan, vol. 25(3), pages 1-29, September.
    4. Niszczota, Paweł & Białek, Michał, 2021. "Women oppose sin stocks more than men do," Finance Research Letters, Elsevier, vol. 41(C).
    5. Meunier, L. & Ohadi, S., 2023. "Exclusion strategy in socially responsible investment: One size does not fit all," Journal of Behavioral and Experimental Finance, Elsevier, vol. 39(C).
    6. Lars Hornuf & Gül Yüksel, 2022. "The Performance of Socially Responsible Investments: A Meta-Analysis," CESifo Working Paper Series 9724, CESifo.

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