Correlation Between Body and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Body and Cresco Labs 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 Body and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Body and Mind and Cresco Labs, you can compare the effects of market volatilities on Body and Cresco Labs 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 Body with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Body and Cresco Labs.
Diversification Opportunities for Body and Cresco Labs
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Body and Cresco is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Body and Mind and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and Body 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 Body and Mind are associated (or correlated) with Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Body i.e., Body and Cresco Labs go up and down completely randomly.
Pair Corralation between Body and Cresco Labs
Given the investment horizon of 90 days Body and Mind is expected to generate 2.39 times more return on investment than Cresco Labs. However, Body is 2.39 times more volatile than Cresco Labs. It trades about 0.04 of its potential returns per unit of risk. Cresco Labs is currently generating about 0.0 per unit of risk. If you would invest 5.06 in Body and Mind on November 27, 2024 and sell it today you would lose (4.28) from holding Body and Mind or give up 84.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Body and Mind vs. Cresco Labs
Performance |
| Timeline |
| Body and Mind |
Risk-Adjusted Performance
OK
Weak | Strong |
| Cresco Labs |
Body and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Body and Cresco Labs
The main advantage of trading using opposite Body and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Body position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Body vs. Goodness Growth Holdings | Body vs. 4Front Ventures Corp | Body vs. Rubicon Organics | Body vs. CLS Holdings USA |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 CEOs Directory module to screen CEOs from public companies around the world.
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