Correlation Between Body and Goodness Growth
Can any of the company-specific risk be diversified away by investing in both Body and Goodness 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 Body and Goodness Growth 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 Goodness Growth Holdings, you can compare the effects of market volatilities on Body and Goodness 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 Body with a short position of Goodness Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Body and Goodness Growth.
Diversification Opportunities for Body and Goodness Growth
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Body and Goodness is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Body and Mind and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings 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 Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of Body i.e., Body and Goodness Growth go up and down completely randomly.
Pair Corralation between Body and Goodness Growth
Given the investment horizon of 90 days Body and Mind is expected to generate 9.11 times more return on investment than Goodness Growth. However, Body is 9.11 times more volatile than Goodness Growth Holdings. It trades about 0.2 of its potential returns per unit of risk. Goodness Growth Holdings is currently generating about -0.16 per unit of risk. If you would invest 1.00 in Body and Mind on October 21, 2024 and sell it today you would earn a total of 0.33 from holding Body and Mind or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Body and Mind vs. Goodness Growth Holdings
Performance |
| Timeline |
| Body and Mind |
| Goodness Growth Holdings |
Body and Goodness Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Body and Goodness Growth
The main advantage of trading using opposite Body and Goodness Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Body position performs unexpectedly, Goodness 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 Goodness Growth will offset losses from the drop in Goodness Growth's long position.| Body vs. Goodness Growth Holdings | Body vs. 4Front Ventures Corp | Body vs. Rubicon Organics | Body vs. CLS Holdings USA |
| Goodness Growth vs. Verano Holdings Corp | Goodness Growth vs. Lowell Farms | Goodness Growth vs. Ascend Wellness Holdings | Goodness Growth vs. 4Front Ventures Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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