Correlation Between Columbia Care and 4Front Ventures
Can any of the company-specific risk be diversified away by investing in both Columbia Care and 4Front Ventures 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 Columbia Care and 4Front Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Care and 4Front Ventures Corp, you can compare the effects of market volatilities on Columbia Care and 4Front Ventures 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 Columbia Care with a short position of 4Front Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Care and 4Front Ventures.
Diversification Opportunities for Columbia Care and 4Front Ventures
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Columbia and 4Front is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Care and 4Front Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Front Ventures Corp and Columbia Care 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 Columbia Care are associated (or correlated) with 4Front Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Front Ventures Corp has no effect on the direction of Columbia Care i.e., Columbia Care and 4Front Ventures go up and down completely randomly.
Pair Corralation between Columbia Care and 4Front Ventures
Assuming the 90 days horizon Columbia Care is expected to under-perform the 4Front Ventures. But the otc stock apears to be less risky and, when comparing its historical volatility, Columbia Care is 1.43 times less risky than 4Front Ventures. The otc stock trades about -0.11 of its potential returns per unit of risk. The 4Front Ventures Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 51.00 in 4Front Ventures Corp on August 24, 2024 and sell it today you would lose (48.20) from holding 4Front Ventures Corp or give up 94.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Columbia Care vs. 4Front Ventures Corp
Performance |
| Timeline |
| Columbia Care |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 4Front Ventures Corp |
Columbia Care and 4Front Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Care and 4Front Ventures
The main advantage of trading using opposite Columbia Care and 4Front Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Care position performs unexpectedly, 4Front Ventures 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 4Front Ventures will offset losses from the drop in 4Front Ventures' long position.| Columbia Care vs. Green Thumb Industries | Columbia Care vs. AYR Strategies Class | Columbia Care vs. Trulieve Cannabis Corp | Columbia Care vs. Goodness Growth Holdings |
| 4Front Ventures vs. Goodness Growth Holdings | 4Front Ventures vs. Body and Mind | 4Front Ventures vs. Rubicon Organics | 4Front Ventures vs. CLS Holdings USA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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