Correlation Between Biofrontera and Flora Growth
Can any of the company-specific risk be diversified away by investing in both Biofrontera 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 Biofrontera and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofrontera and Flora Growth Corp, you can compare the effects of market volatilities on Biofrontera 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 Biofrontera with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera and Flora Growth.
Diversification Opportunities for Biofrontera and Flora Growth
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biofrontera and Flora is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera 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 Biofrontera 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 Biofrontera 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 Biofrontera i.e., Biofrontera and Flora Growth go up and down completely randomly.
Pair Corralation between Biofrontera and Flora Growth
Given the investment horizon of 90 days Biofrontera is expected to under-perform the Flora Growth. But the stock apears to be less risky and, when comparing its historical volatility, Biofrontera is 1.11 times less risky than Flora Growth. The stock trades about -0.05 of its potential returns per unit of risk. The Flora Growth Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 933.00 in Flora Growth Corp on August 26, 2024 and sell it today you would lose (790.00) from holding Flora Growth Corp or give up 84.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biofrontera vs. Flora Growth Corp
Performance |
| Timeline |
| Biofrontera |
| Flora Growth Corp |
Biofrontera and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofrontera and Flora Growth
The main advantage of trading using opposite Biofrontera and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera 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.| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
| Flora Growth vs. Eliem Therapeutics | Flora Growth vs. HCW Biologics | Flora Growth vs. Scpharmaceuticals | Flora Growth vs. Milestone Pharmaceuticals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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