Correlation Between Flora Growth and Medpace Holdings
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Medpace Holdings 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 Medpace Holdings 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 Medpace Holdings, you can compare the effects of market volatilities on Flora Growth and Medpace Holdings 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 Medpace Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Medpace Holdings.
Diversification Opportunities for Flora Growth and Medpace Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flora and Medpace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Medpace Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medpace 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 Medpace Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medpace Holdings has no effect on the direction of Flora Growth i.e., Flora Growth and Medpace Holdings go up and down completely randomly.
Pair Corralation between Flora Growth and Medpace Holdings
Given the investment horizon of 90 days Flora Growth Corp is expected to under-perform the Medpace Holdings. In addition to that, Flora Growth is 2.39 times more volatile than Medpace Holdings. It trades about -0.1 of its total potential returns per unit of risk. Medpace Holdings is currently generating about 0.05 per unit of volatility. If you would invest 32,935 in Medpace Holdings on August 28, 2024 and sell it today you would earn a total of 847.00 from holding Medpace Holdings or generate 2.57% 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. Medpace Holdings
Performance |
| Timeline |
| Flora Growth Corp |
| Medpace Holdings |
Flora Growth and Medpace Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Medpace Holdings
The main advantage of trading using opposite Flora Growth and Medpace Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Medpace Holdings 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 Medpace Holdings will offset losses from the drop in Medpace Holdings' long position.| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
| Medpace Holdings vs. IQVIA Holdings | Medpace Holdings vs. Neogen | Medpace Holdings vs. ICON PLC | Medpace Holdings vs. Qiagen NV |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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