Correlation Between Acreage Holdings and 4Front Ventures
Can any of the company-specific risk be diversified away by investing in both Acreage Holdings and 4Front Ventures 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 4Front Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acreage Holdings and 4Front Ventures Corp, you can compare the effects of market volatilities on Acreage Holdings and 4Front Ventures 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 4Front Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acreage Holdings and 4Front Ventures.
Diversification Opportunities for Acreage Holdings and 4Front Ventures
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acreage and 4Front is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Acreage Holdings and 4Front Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Front Ventures 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 4Front Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Front Ventures Corp has no effect on the direction of Acreage Holdings i.e., Acreage Holdings and 4Front Ventures go up and down completely randomly.
Pair Corralation between Acreage Holdings and 4Front Ventures
Assuming the 90 days horizon Acreage Holdings is expected to under-perform the 4Front Ventures. In addition to that, Acreage Holdings is 1.11 times more volatile than 4Front Ventures Corp. It trades about -0.13 of its total potential returns per unit of risk. 4Front Ventures Corp is currently generating about -0.07 per unit of volatility. If you would invest 8.60 in 4Front Ventures Corp on September 13, 2024 and sell it today you would lose (7.08) from holding 4Front Ventures Corp or give up 82.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
Acreage Holdings vs. 4Front Ventures Corp
Performance |
| Timeline |
| Acreage Holdings |
| 4Front Ventures Corp |
Acreage Holdings and 4Front Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acreage Holdings and 4Front Ventures
The main advantage of trading using opposite Acreage Holdings and 4Front Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acreage Holdings position performs unexpectedly, 4Front Ventures 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 4Front Ventures will offset losses from the drop in 4Front Ventures' long position.| Acreage Holdings vs. 4Front Ventures Corp | Acreage Holdings vs. Khiron Life Sciences | Acreage Holdings vs. BellRock Brands | Acreage Holdings vs. Elixinol Global |
| 4Front Ventures vs. Khiron Life Sciences | 4Front Ventures vs. BellRock Brands | 4Front Ventures vs. Elixinol Global |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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