Correlation Between Aleafia Health and Biome Grow
Can any of the company-specific risk be diversified away by investing in both Aleafia Health and Biome Grow 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 Aleafia Health and Biome Grow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aleafia Health and Biome Grow, you can compare the effects of market volatilities on Aleafia Health and Biome Grow 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 Aleafia Health with a short position of Biome Grow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aleafia Health and Biome Grow.
Diversification Opportunities for Aleafia Health and Biome Grow
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aleafia and Biome is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aleafia Health and Biome Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biome Grow and Aleafia Health 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 Aleafia Health are associated (or correlated) with Biome Grow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biome Grow has no effect on the direction of Aleafia Health i.e., Aleafia Health and Biome Grow go up and down completely randomly.
Pair Corralation between Aleafia Health and Biome Grow
If you would invest 0.74 in Biome Grow on August 31, 2024 and sell it today you would lose (0.36) from holding Biome Grow or give up 48.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Aleafia Health vs. Biome Grow
Performance |
| Timeline |
| Aleafia Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biome Grow |
Aleafia Health and Biome Grow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aleafia Health and Biome Grow
The main advantage of trading using opposite Aleafia Health and Biome Grow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aleafia Health position performs unexpectedly, Biome Grow 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 Biome Grow will offset losses from the drop in Biome Grow's long position.| Aleafia Health vs. Acreage Holdings | Aleafia Health vs. Verano Holdings Corp | Aleafia Health vs. Pharmagreen Biotech | Aleafia Health vs. Mydecine Innovations Group |
| Biome Grow vs. Holloman Energy Corp | Biome Grow vs. cbdMD Inc | Biome Grow vs. Evolus Inc | Biome Grow vs. CV Sciences |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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