Correlation Between 4Front Ventures and Flowr Corp
Can any of the company-specific risk be diversified away by investing in both 4Front Ventures and Flowr Corp 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 Flowr Corp 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 Flowr Corp, you can compare the effects of market volatilities on 4Front Ventures and Flowr Corp 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 Flowr Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Front Ventures and Flowr Corp.
Diversification Opportunities for 4Front Ventures and Flowr Corp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 4Front and Flowr is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding 4Front Ventures Corp and Flowr Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowr Corp 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 Flowr Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowr Corp has no effect on the direction of 4Front Ventures i.e., 4Front Ventures and Flowr Corp go up and down completely randomly.
Pair Corralation between 4Front Ventures and Flowr Corp
Assuming the 90 days horizon 4Front Ventures is expected to generate 201.33 times less return on investment than Flowr Corp. But when comparing it to its historical volatility, 4Front Ventures Corp is 12.62 times less risky than Flowr Corp. It trades about 0.01 of its potential returns per unit of risk. Flowr Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.90 in Flowr Corp on September 12, 2024 and sell it today you would lose (1.90) from holding Flowr Corp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.33% |
| Values | Daily Returns |
4Front Ventures Corp vs. Flowr Corp
Performance |
| Timeline |
| 4Front Ventures Corp |
| Flowr Corp |
4Front Ventures and Flowr Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Front Ventures and Flowr Corp
The main advantage of trading using opposite 4Front Ventures and Flowr Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Front Ventures position performs unexpectedly, Flowr Corp 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 Flowr Corp will offset losses from the drop in Flowr Corp's long position.| 4Front Ventures vs. Goodness Growth Holdings | 4Front Ventures vs. Body and Mind | 4Front Ventures vs. Rubicon Organics | 4Front Ventures vs. CLS Holdings USA |
| Flowr Corp vs. 4Front Ventures Corp | Flowr Corp vs. Khiron Life Sciences | Flowr Corp vs. BellRock Brands | Flowr Corp vs. Elixinol Global |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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