Correlation Between BC Bud and Lowell Farms
Can any of the company-specific risk be diversified away by investing in both BC Bud and Lowell Farms 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 BC Bud and Lowell Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The BC Bud and Lowell Farms, you can compare the effects of market volatilities on BC Bud and Lowell Farms 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 BC Bud with a short position of Lowell Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Bud and Lowell Farms.
Diversification Opportunities for BC Bud and Lowell Farms
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BCBCF and Lowell is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The BC Bud and Lowell Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowell Farms and BC Bud 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 The BC Bud are associated (or correlated) with Lowell Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowell Farms has no effect on the direction of BC Bud i.e., BC Bud and Lowell Farms go up and down completely randomly.
Pair Corralation between BC Bud and Lowell Farms
Assuming the 90 days horizon BC Bud is expected to generate 1.1 times less return on investment than Lowell Farms. In addition to that, BC Bud is 1.06 times more volatile than Lowell Farms. It trades about 0.05 of its total potential returns per unit of risk. Lowell Farms is currently generating about 0.06 per unit of volatility. If you would invest 1.20 in Lowell Farms on January 15, 2025 and sell it today you would lose (0.15) from holding Lowell Farms or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
The BC Bud vs. Lowell Farms
Performance |
| Timeline |
| BC Bud |
| Lowell Farms |
BC Bud and Lowell Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BC Bud and Lowell Farms
The main advantage of trading using opposite BC Bud and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BC Bud position performs unexpectedly, Lowell Farms 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 Lowell Farms will offset losses from the drop in Lowell Farms' long position.| BC Bud vs. Amexdrug | BC Bud vs. Crescita Therapeutics | BC Bud vs. Aion Therapeutic | BC Bud vs. Alterola Biotech |
| Lowell Farms vs. Medicine Man Technologies | Lowell Farms vs. Ascend Wellness Holdings | Lowell Farms vs. Goodness Growth Holdings | Lowell Farms vs. AYR Strategies Class |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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