Correlation Between Flora Growth and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Ikena Oncology 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 Ikena Oncology 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 Ikena Oncology, you can compare the effects of market volatilities on Flora Growth and Ikena Oncology 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 Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Ikena Oncology.
Diversification Opportunities for Flora Growth and Ikena Oncology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flora and Ikena is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Flora Growth i.e., Flora Growth and Ikena Oncology go up and down completely randomly.
Pair Corralation between Flora Growth and Ikena Oncology
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 5.22 times more return on investment than Ikena Oncology. However, Flora Growth is 5.22 times more volatile than Ikena Oncology. It trades about 0.19 of its potential returns per unit of risk. Ikena Oncology is currently generating about 0.03 per unit of risk. If you would invest 136.00 in Flora Growth Corp on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Flora Growth Corp or generate 27.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flora Growth Corp vs. Ikena Oncology
Performance |
| Timeline |
| Flora Growth Corp |
| Ikena Oncology |
Flora Growth and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Ikena Oncology
The main advantage of trading using opposite Flora Growth and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem Therapeutics |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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