Correlation Between Flora Growth and Biofrontera
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Biofrontera 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 Flora Growth and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flora Growth Corp and Biofrontera, you can compare the effects of market volatilities on Flora Growth and Biofrontera 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 Flora Growth with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Biofrontera.
Diversification Opportunities for Flora Growth and Biofrontera
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flora and Biofrontera is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Flora Growth 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 Flora Growth Corp are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Flora Growth i.e., Flora Growth and Biofrontera go up and down completely randomly.
Pair Corralation between Flora Growth and Biofrontera
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 0.91 times more return on investment than Biofrontera. However, Flora Growth Corp is 1.1 times less risky than Biofrontera. It trades about 0.07 of its potential returns per unit of risk. Biofrontera is currently generating about 0.03 per unit of risk. If you would invest 115.00 in Flora Growth Corp on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Flora Growth Corp or generate 36.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flora Growth Corp vs. Biofrontera
Performance |
| Timeline |
| Flora Growth Corp |
| Biofrontera |
Flora Growth and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Biofrontera
The main advantage of trading using opposite Flora Growth and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| Flora Growth vs. Phibro Animal Health | Flora Growth vs. Procaps Group SA | Flora Growth vs. Amphastar P | Flora Growth vs. Alkermes Plc |
| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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