Correlation Between Day One and Flora Growth
Can any of the company-specific risk be diversified away by investing in both Day One 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 Day One and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Day One Biopharmaceuticals and Flora Growth Corp, you can compare the effects of market volatilities on Day One 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 Day One with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Day One and Flora Growth.
Diversification Opportunities for Day One and Flora Growth
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Day and Flora is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Day One Biopharmaceuticals 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 Day One 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 Day One Biopharmaceuticals 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 Day One i.e., Day One and Flora Growth go up and down completely randomly.
Pair Corralation between Day One and Flora Growth
Given the investment horizon of 90 days Day One Biopharmaceuticals is expected to under-perform the Flora Growth. But the stock apears to be less risky and, when comparing its historical volatility, Day One Biopharmaceuticals is 2.65 times less risky than Flora Growth. The stock trades about -0.27 of its potential returns per unit of risk. The Flora Growth Corp is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Flora Growth Corp on September 14, 2024 and sell it today you would earn a total of 85.00 from holding Flora Growth Corp or generate 75.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Day One Biopharmaceuticals vs. Flora Growth Corp
Performance |
| Timeline |
| Day One Biopharmaceu |
| Flora Growth Corp |
Day One and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Day One and Flora Growth
The main advantage of trading using opposite Day One and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Day One 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.| Day One vs. X4 Pharmaceuticals | Day One vs. Inozyme Pharma | Day One vs. Acumen Pharmaceuticals | Day One vs. Mereo BioPharma Group |
| Flora Growth vs. Puma Biotechnology | Flora Growth vs. Iovance Biotherapeutics | Flora Growth vs. Day One Biopharmaceuticals | Flora Growth vs. Inozyme Pharma |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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