Correlation Between Flora Growth and Compugen
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Compugen 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 Compugen 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 Compugen, you can compare the effects of market volatilities on Flora Growth and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Compugen.
Diversification Opportunities for Flora Growth and Compugen
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flora and Compugen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Flora Growth i.e., Flora Growth and Compugen go up and down completely randomly.
Pair Corralation between Flora Growth and Compugen
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 1.83 times more return on investment than Compugen. However, Flora Growth is 1.83 times more volatile than Compugen. It trades about 0.07 of its potential returns per unit of risk. Compugen is currently generating about -0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flora Growth Corp vs. Compugen
Performance |
| Timeline |
| Flora Growth Corp |
| Compugen |
Flora Growth and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Compugen
The main advantage of trading using opposite Flora Growth and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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