Correlation Between RIV Capital and Flora Growth
Can any of the company-specific risk be diversified away by investing in both RIV Capital 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 RIV Capital and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RIV Capital and Flora Growth Corp, you can compare the effects of market volatilities on RIV Capital 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 RIV Capital with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of RIV Capital and Flora Growth.
Diversification Opportunities for RIV Capital and Flora Growth
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RIV and Flora is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding RIV Capital 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 RIV Capital 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 RIV Capital 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 RIV Capital i.e., RIV Capital and Flora Growth go up and down completely randomly.
Pair Corralation between RIV Capital and Flora Growth
Assuming the 90 days horizon RIV Capital is expected to generate 0.99 times more return on investment than Flora Growth. However, RIV Capital is 1.01 times less risky than Flora Growth. It trades about 0.03 of its potential returns per unit of risk. Flora Growth Corp is currently generating about -0.02 per unit of risk. If you would invest 13.00 in RIV Capital on November 2, 2024 and sell it today you would lose (5.00) from holding RIV Capital or give up 38.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.93% |
| Values | Daily Returns |
RIV Capital vs. Flora Growth Corp
Performance |
| Timeline |
| RIV Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Flora Growth Corp |
RIV Capital and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RIV Capital and Flora Growth
The main advantage of trading using opposite RIV Capital and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RIV Capital 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.| RIV Capital vs. MPX International Corp | RIV Capital vs. 4Front Ventures Corp | RIV Capital vs. StateHouse Holdings | RIV Capital vs. Decibel Cannabis |
| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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