Correlation Between Acreage Holdings and GelStat Corp
Can any of the company-specific risk be diversified away by investing in both Acreage Holdings and GelStat 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 Acreage Holdings and GelStat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acreage Holdings and GelStat Corp, you can compare the effects of market volatilities on Acreage Holdings and GelStat 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 Acreage Holdings with a short position of GelStat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acreage Holdings and GelStat Corp.
Diversification Opportunities for Acreage Holdings and GelStat Corp
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Acreage and GelStat is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Acreage Holdings and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp and Acreage Holdings 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 Acreage Holdings are associated (or correlated) with GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of Acreage Holdings i.e., Acreage Holdings and GelStat Corp go up and down completely randomly.
Pair Corralation between Acreage Holdings and GelStat Corp
Assuming the 90 days horizon Acreage Holdings is expected to under-perform the GelStat Corp. In addition to that, Acreage Holdings is 1.26 times more volatile than GelStat Corp. It trades about -0.09 of its total potential returns per unit of risk. GelStat Corp is currently generating about -0.03 per unit of volatility. If you would invest 0.04 in GelStat Corp on August 30, 2024 and sell it today you would lose (0.01) from holding GelStat Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acreage Holdings vs. GelStat Corp
Performance |
| Timeline |
| Acreage Holdings |
| GelStat Corp |
Acreage Holdings and GelStat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acreage Holdings and GelStat Corp
The main advantage of trading using opposite Acreage Holdings and GelStat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acreage Holdings position performs unexpectedly, GelStat 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 GelStat Corp will offset losses from the drop in GelStat Corp's long position.| Acreage Holdings vs. AYR Strategies Class | Acreage Holdings vs. RIV Capital | Acreage Holdings vs. Verano Holdings Corp | Acreage Holdings vs. BZAM |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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