Correlation Between Allied Corp and Flora Growth
Can any of the company-specific risk be diversified away by investing in both Allied Corp and Flora Growth 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 Allied Corp and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Corp and Flora Growth Corp, you can compare the effects of market volatilities on Allied Corp and Flora Growth 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 Allied Corp with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Corp and Flora Growth.
Diversification Opportunities for Allied Corp and Flora Growth
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allied and Flora is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Allied Corp and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp and Allied Corp 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 Allied Corp are associated (or correlated) with Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of Allied Corp i.e., Allied Corp and Flora Growth go up and down completely randomly.
Pair Corralation between Allied Corp and Flora Growth
Given the investment horizon of 90 days Allied Corp is expected to generate 1.99 times more return on investment than Flora Growth. However, Allied Corp is 1.99 times more volatile than Flora Growth Corp. It trades about 0.05 of its potential returns per unit of risk. Flora Growth Corp is currently generating about 0.0 per unit of risk. If you would invest 25.00 in Allied Corp on August 29, 2024 and sell it today you would lose (21.97) from holding Allied Corp or give up 87.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Corp vs. Flora Growth Corp
Performance |
| Timeline |
| Allied Corp |
| Flora Growth Corp |
Allied Corp and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Corp and Flora Growth
The main advantage of trading using opposite Allied Corp and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Corp position performs unexpectedly, Flora Growth 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 Flora Growth will offset losses from the drop in Flora Growth's long position.| Allied Corp vs. The BC Bud | Allied Corp vs. Amexdrug | Allied Corp vs. Aion Therapeutic | Allied Corp vs. Antisense Therapeutics Limited |
| Flora Growth vs. Phibro Animal Health | Flora Growth vs. Procaps Group SA | Flora Growth vs. Amphastar P | Flora Growth vs. Alkermes Plc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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