Correlation Between Columbia Care and Verano Holdings
Can any of the company-specific risk be diversified away by investing in both Columbia Care and Verano Holdings 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 Verano Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Care and Verano Holdings Corp, you can compare the effects of market volatilities on Columbia Care and Verano Holdings 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 Verano Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Care and Verano Holdings.
Diversification Opportunities for Columbia Care and Verano Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Verano is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Care and Verano Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verano Holdings 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 Verano Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verano Holdings Corp has no effect on the direction of Columbia Care i.e., Columbia Care and Verano Holdings go up and down completely randomly.
Pair Corralation between Columbia Care and Verano Holdings
Assuming the 90 days horizon Columbia Care is expected to under-perform the Verano Holdings. In addition to that, Columbia Care is 1.18 times more volatile than Verano Holdings Corp. It trades about -0.1 of its total potential returns per unit of risk. Verano Holdings Corp is currently generating about -0.02 per unit of volatility. If you would invest 477.00 in Verano Holdings Corp on August 28, 2024 and sell it today you would lose (331.00) from holding Verano Holdings Corp or give up 69.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Columbia Care vs. Verano Holdings Corp
Performance |
| Timeline |
| Columbia Care |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Verano Holdings Corp |
Columbia Care and Verano Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Care and Verano Holdings
The main advantage of trading using opposite Columbia Care and Verano Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Care position performs unexpectedly, Verano Holdings 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 Verano Holdings will offset losses from the drop in Verano Holdings' 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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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