Correlation Between 4Front Ventures and IAnthus Capital
Can any of the company-specific risk be diversified away by investing in both 4Front Ventures and IAnthus Capital 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 IAnthus Capital 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 iAnthus Capital Holdings, you can compare the effects of market volatilities on 4Front Ventures and IAnthus Capital 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 IAnthus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Front Ventures and IAnthus Capital.
Diversification Opportunities for 4Front Ventures and IAnthus Capital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 4Front and IAnthus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding 4Front Ventures Corp and iAnthus Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iAnthus Capital 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 IAnthus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iAnthus Capital Holdings has no effect on the direction of 4Front Ventures i.e., 4Front Ventures and IAnthus Capital go up and down completely randomly.
Pair Corralation between 4Front Ventures and IAnthus Capital
Assuming the 90 days horizon 4Front Ventures Corp is expected to under-perform the IAnthus Capital. But the otc stock apears to be less risky and, when comparing its historical volatility, 4Front Ventures Corp is 1.15 times less risky than IAnthus Capital. The otc stock trades about -0.01 of its potential returns per unit of risk. The iAnthus Capital Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.20 in iAnthus Capital Holdings on September 12, 2024 and sell it today you would lose (2.52) from holding iAnthus Capital Holdings or give up 78.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
4Front Ventures Corp vs. iAnthus Capital Holdings
Performance |
| Timeline |
| 4Front Ventures Corp |
| iAnthus Capital Holdings |
4Front Ventures and IAnthus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Front Ventures and IAnthus Capital
The main advantage of trading using opposite 4Front Ventures and IAnthus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Front Ventures position performs unexpectedly, IAnthus Capital 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 IAnthus Capital will offset losses from the drop in IAnthus Capital'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 |
| IAnthus Capital vs. 4Front Ventures Corp | IAnthus Capital vs. Khiron Life Sciences | IAnthus Capital vs. BellRock Brands | IAnthus Capital 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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