Correlation Between Avicanna and Grown Rogue
Can any of the company-specific risk be diversified away by investing in both Avicanna and Grown Rogue 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 Avicanna and Grown Rogue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avicanna and Grown Rogue International, you can compare the effects of market volatilities on Avicanna and Grown Rogue 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 Avicanna with a short position of Grown Rogue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avicanna and Grown Rogue.
Diversification Opportunities for Avicanna and Grown Rogue
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avicanna and Grown is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Avicanna and Grown Rogue International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grown Rogue International and Avicanna 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 Avicanna are associated (or correlated) with Grown Rogue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grown Rogue International has no effect on the direction of Avicanna i.e., Avicanna and Grown Rogue go up and down completely randomly.
Pair Corralation between Avicanna and Grown Rogue
Assuming the 90 days horizon Avicanna is expected to generate 2.4 times less return on investment than Grown Rogue. In addition to that, Avicanna is 1.27 times more volatile than Grown Rogue International. It trades about 0.03 of its total potential returns per unit of risk. Grown Rogue International is currently generating about 0.09 per unit of volatility. If you would invest 10.00 in Grown Rogue International on December 4, 2024 and sell it today you would earn a total of 50.00 from holding Grown Rogue International or generate 500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avicanna vs. Grown Rogue International
Performance |
| Timeline |
| Avicanna |
| Grown Rogue International |
Avicanna and Grown Rogue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avicanna and Grown Rogue
The main advantage of trading using opposite Avicanna and Grown Rogue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avicanna position performs unexpectedly, Grown Rogue 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 Grown Rogue will offset losses from the drop in Grown Rogue's long position.| Avicanna vs. Pharmacielo | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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