Correlation Between Flora Growth and Charlottes Web
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Charlottes Web 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 Charlottes Web 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 Charlottes Web Holdings, you can compare the effects of market volatilities on Flora Growth and Charlottes Web 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 Charlottes Web. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Charlottes Web.
Diversification Opportunities for Flora Growth and Charlottes Web
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flora and Charlottes is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Charlottes Web Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charlottes Web Holdings 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 Charlottes Web. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charlottes Web Holdings has no effect on the direction of Flora Growth i.e., Flora Growth and Charlottes Web go up and down completely randomly.
Pair Corralation between Flora Growth and Charlottes Web
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 1.53 times more return on investment than Charlottes Web. However, Flora Growth is 1.53 times more volatile than Charlottes Web Holdings. It trades about -0.02 of its potential returns per unit of risk. Charlottes Web Holdings is currently generating about -0.03 per unit of risk. If you would invest 737.00 in Flora Growth Corp on November 2, 2024 and sell it today you would lose (660.01) from holding Flora Growth Corp or give up 89.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Flora Growth Corp vs. Charlottes Web Holdings
Performance |
| Timeline |
| Flora Growth Corp |
| Charlottes Web Holdings |
Flora Growth and Charlottes Web Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Charlottes Web
The main advantage of trading using opposite Flora Growth and Charlottes Web positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Charlottes Web 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 Charlottes Web will offset losses from the drop in Charlottes Web's long position.| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
| Charlottes Web vs. Verano Holdings Corp | Charlottes Web vs. Cresco Labs | Charlottes Web vs. AYR Strategies Class | Charlottes Web vs. Green Thumb Industries |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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