Correlation Between Ascend Wellness and Trulieve Cannabis
Can any of the company-specific risk be diversified away by investing in both Ascend Wellness and Trulieve Cannabis 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 Trulieve Cannabis 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 Trulieve Cannabis Corp, you can compare the effects of market volatilities on Ascend Wellness and Trulieve Cannabis 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 Trulieve Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascend Wellness and Trulieve Cannabis.
Diversification Opportunities for Ascend Wellness and Trulieve Cannabis
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ascend and Trulieve is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ascend Wellness Holdings and Trulieve Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trulieve Cannabis Corp 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 Trulieve Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trulieve Cannabis Corp has no effect on the direction of Ascend Wellness i.e., Ascend Wellness and Trulieve Cannabis go up and down completely randomly.
Pair Corralation between Ascend Wellness and Trulieve Cannabis
Given the investment horizon of 90 days Ascend Wellness Holdings is expected to under-perform the Trulieve Cannabis. But the otc stock apears to be less risky and, when comparing its historical volatility, Ascend Wellness Holdings is 1.38 times less risky than Trulieve Cannabis. The otc stock trades about -0.23 of its potential returns per unit of risk. The Trulieve Cannabis Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Trulieve Cannabis Corp on August 28, 2024 and sell it today you would lose (247.00) from holding Trulieve Cannabis Corp or give up 28.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascend Wellness Holdings vs. Trulieve Cannabis Corp
Performance |
| Timeline |
| Ascend Wellness Holdings |
| Trulieve Cannabis Corp |
Ascend Wellness and Trulieve Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascend Wellness and Trulieve Cannabis
The main advantage of trading using opposite Ascend Wellness and Trulieve Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascend Wellness position performs unexpectedly, Trulieve Cannabis 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 Trulieve Cannabis will offset losses from the drop in Trulieve Cannabis' 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 |
| Trulieve Cannabis vs. Green Thumb Industries | Trulieve Cannabis vs. Curaleaf Holdings | Trulieve Cannabis vs. Cresco Labs | Trulieve Cannabis 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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