Correlation Between Evoke Pharma and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Evoke Pharma and Cresco Labs 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 Evoke Pharma and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evoke Pharma and Cresco Labs, you can compare the effects of market volatilities on Evoke Pharma and Cresco Labs 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 Evoke Pharma with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evoke Pharma and Cresco Labs.
Diversification Opportunities for Evoke Pharma and Cresco Labs
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evoke and Cresco is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Evoke Pharma and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and Evoke Pharma 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 Evoke Pharma are associated (or correlated) with Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Evoke Pharma i.e., Evoke Pharma and Cresco Labs go up and down completely randomly.
Pair Corralation between Evoke Pharma and Cresco Labs
Given the investment horizon of 90 days Evoke Pharma is expected to under-perform the Cresco Labs. In addition to that, Evoke Pharma is 1.09 times more volatile than Cresco Labs. It trades about -0.02 of its total potential returns per unit of risk. Cresco Labs is currently generating about -0.01 per unit of volatility. If you would invest 385.00 in Cresco Labs on August 24, 2024 and sell it today you would lose (265.00) from holding Cresco Labs or give up 68.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evoke Pharma vs. Cresco Labs
Performance |
| Timeline |
| Evoke Pharma |
| Cresco Labs |
Evoke Pharma and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evoke Pharma and Cresco Labs
The main advantage of trading using opposite Evoke Pharma and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evoke Pharma position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Evoke Pharma vs. Petros Pharmaceuticals | Evoke Pharma vs. Cumberland Pharmaceuticals | Evoke Pharma vs. Painreform | Evoke Pharma vs. Aquestive Therapeutics |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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