Correlation Between Charlottes Web and Biofrontera
Can any of the company-specific risk be diversified away by investing in both Charlottes Web and Biofrontera 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 Charlottes Web and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charlottes Web Holdings and Biofrontera, you can compare the effects of market volatilities on Charlottes Web and Biofrontera 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 Charlottes Web with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charlottes Web and Biofrontera.
Diversification Opportunities for Charlottes Web and Biofrontera
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charlottes and Biofrontera is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Charlottes Web Holdings and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Charlottes Web 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 Charlottes Web Holdings are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Charlottes Web i.e., Charlottes Web and Biofrontera go up and down completely randomly.
Pair Corralation between Charlottes Web and Biofrontera
Assuming the 90 days horizon Charlottes Web Holdings is expected to generate 0.61 times more return on investment than Biofrontera. However, Charlottes Web Holdings is 1.64 times less risky than Biofrontera. It trades about -0.01 of its potential returns per unit of risk. Biofrontera is currently generating about -0.01 per unit of risk. If you would invest 21.00 in Charlottes Web Holdings on September 2, 2024 and sell it today you would lose (8.00) from holding Charlottes Web Holdings or give up 38.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charlottes Web Holdings vs. Biofrontera
Performance |
| Timeline |
| Charlottes Web Holdings |
| Biofrontera |
Charlottes Web and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charlottes Web and Biofrontera
The main advantage of trading using opposite Charlottes Web and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charlottes Web position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| Charlottes Web vs. Verano Holdings Corp | Charlottes Web vs. Cresco Labs | Charlottes Web vs. AYR Strategies Class | Charlottes Web vs. Green Thumb Industries |
| Biofrontera vs. Tff Pharmaceuticals | Biofrontera vs. Eliem Therapeutics | Biofrontera vs. Inhibrx | Biofrontera vs. Enliven Therapeutics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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