Correlation Between Ascend Wellness and Green Thumb
Can any of the company-specific risk be diversified away by investing in both Ascend Wellness and Green Thumb 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 Ascend Wellness and Green Thumb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascend Wellness Holdings and Green Thumb Industries, you can compare the effects of market volatilities on Ascend Wellness and Green Thumb 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 Ascend Wellness with a short position of Green Thumb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascend Wellness and Green Thumb.
Diversification Opportunities for Ascend Wellness and Green Thumb
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ascend and Green is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ascend Wellness Holdings and Green Thumb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Thumb Industries and Ascend Wellness 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 Ascend Wellness Holdings are associated (or correlated) with Green Thumb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Thumb Industries has no effect on the direction of Ascend Wellness i.e., Ascend Wellness and Green Thumb go up and down completely randomly.
Pair Corralation between Ascend Wellness and Green Thumb
Given the investment horizon of 90 days Ascend Wellness Holdings is expected to under-perform the Green Thumb. In addition to that, Ascend Wellness is 1.32 times more volatile than Green Thumb Industries. It trades about -0.03 of its total potential returns per unit of risk. Green Thumb Industries is currently generating about 0.01 per unit of volatility. If you would invest 840.00 in Green Thumb Industries on November 2, 2024 and sell it today you would lose (148.00) from holding Green Thumb Industries or give up 17.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascend Wellness Holdings vs. Green Thumb Industries
Performance |
| Timeline |
| Ascend Wellness Holdings |
| Green Thumb Industries |
Ascend Wellness and Green Thumb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascend Wellness and Green Thumb
The main advantage of trading using opposite Ascend Wellness and Green Thumb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascend Wellness position performs unexpectedly, Green Thumb 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 Green Thumb will offset losses from the drop in Green Thumb's long position.| Ascend Wellness vs. Verano Holdings Corp | Ascend Wellness vs. Green Thumb Industries | Ascend Wellness vs. AYR Strategies Class | Ascend Wellness vs. Trulieve Cannabis Corp |
| Green Thumb vs. Curaleaf Holdings | Green Thumb vs. Trulieve Cannabis Corp | Green Thumb vs. Cresco Labs | Green Thumb vs. GrowGeneration Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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