Correlation Between 4Front Ventures and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both 4Front Ventures and Curaleaf Holdings 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 4Front Ventures and Curaleaf Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4Front Ventures Corp and Curaleaf Holdings, you can compare the effects of market volatilities on 4Front Ventures and Curaleaf Holdings 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 4Front Ventures with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Front Ventures and Curaleaf Holdings.
Diversification Opportunities for 4Front Ventures and Curaleaf Holdings
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between 4Front and Curaleaf is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding 4Front Ventures Corp and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and 4Front Ventures 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 4Front Ventures Corp are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of 4Front Ventures i.e., 4Front Ventures and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between 4Front Ventures and Curaleaf Holdings
Assuming the 90 days horizon 4Front Ventures Corp is expected to generate 3.25 times more return on investment than Curaleaf Holdings. However, 4Front Ventures is 3.25 times more volatile than Curaleaf Holdings. It trades about 0.02 of its potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.01 per unit of risk. If you would invest 16.00 in 4Front Ventures Corp on January 19, 2025 and sell it today you would lose (15.40) from holding 4Front Ventures Corp or give up 96.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
4Front Ventures Corp vs. Curaleaf Holdings
Performance |
| Timeline |
| 4Front Ventures Corp |
| Curaleaf Holdings |
4Front Ventures and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Front Ventures and Curaleaf Holdings
The main advantage of trading using opposite 4Front Ventures and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Front Ventures position performs unexpectedly, Curaleaf Holdings 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' long position.| 4Front Ventures vs. Verano Holdings Corp | 4Front Ventures vs. Lowell Farms | 4Front Ventures vs. Ascend Wellness Holdings | 4Front Ventures vs. AYR Strategies Class |
| Curaleaf Holdings vs. Green Thumb Industries | Curaleaf Holdings vs. Cresco Labs | Curaleaf Holdings vs. Trulieve Cannabis Corp | Curaleaf Holdings vs. Cronos Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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