Correlation Between BC Craft and Lowell Farms
Can any of the company-specific risk be diversified away by investing in both BC Craft and Lowell Farms 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 BC Craft and Lowell Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BC Craft Supply and Lowell Farms, you can compare the effects of market volatilities on BC Craft and Lowell Farms 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 BC Craft with a short position of Lowell Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Craft and Lowell Farms.
Diversification Opportunities for BC Craft and Lowell Farms
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CRFTF and Lowell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BC Craft Supply and Lowell Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowell Farms and BC Craft 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 BC Craft Supply are associated (or correlated) with Lowell Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowell Farms has no effect on the direction of BC Craft i.e., BC Craft and Lowell Farms go up and down completely randomly.
Pair Corralation between BC Craft and Lowell Farms
Assuming the 90 days horizon BC Craft is expected to generate 1.88 times less return on investment than Lowell Farms. In addition to that, BC Craft is 1.04 times more volatile than Lowell Farms. It trades about 0.05 of its total potential returns per unit of risk. Lowell Farms is currently generating about 0.1 per unit of volatility. If you would invest 6.74 in Lowell Farms on September 1, 2024 and sell it today you would lose (5.14) from holding Lowell Farms or give up 76.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BC Craft Supply vs. Lowell Farms
Performance |
| Timeline |
| BC Craft Supply |
| Lowell Farms |
BC Craft and Lowell Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BC Craft and Lowell Farms
The main advantage of trading using opposite BC Craft and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BC Craft position performs unexpectedly, Lowell Farms 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 Lowell Farms will offset losses from the drop in Lowell Farms' long position.| BC Craft vs. Holloman Energy Corp | BC Craft vs. cbdMD Inc | BC Craft vs. Evolus Inc | BC Craft vs. CV Sciences |
| Lowell Farms vs. Medicine Man Technologies | Lowell Farms vs. Ascend Wellness Holdings | Lowell Farms vs. Goodness Growth Holdings | Lowell Farms vs. AYR Strategies Class |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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