Correlation Between Flora Growth and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Puma Biotechnology 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 Puma Biotechnology 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 Puma Biotechnology, you can compare the effects of market volatilities on Flora Growth and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Puma Biotechnology.
Diversification Opportunities for Flora Growth and Puma Biotechnology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flora and Puma is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Flora Growth i.e., Flora Growth and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Flora Growth and Puma Biotechnology
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 1.64 times more return on investment than Puma Biotechnology. However, Flora Growth is 1.64 times more volatile than Puma Biotechnology. It trades about 0.05 of its potential returns per unit of risk. Puma Biotechnology is currently generating about 0.0 per unit of risk. If you would invest 100.00 in Flora Growth Corp on September 14, 2024 and sell it today you would earn a total of 30.00 from holding Flora Growth Corp or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flora Growth Corp vs. Puma Biotechnology
Performance |
| Timeline |
| Flora Growth Corp |
| Puma Biotechnology |
Flora Growth and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Puma Biotechnology
The main advantage of trading using opposite Flora Growth and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.| Flora Growth vs. Puma Biotechnology | Flora Growth vs. Iovance Biotherapeutics | Flora Growth vs. Day One Biopharmaceuticals | Flora Growth vs. Inozyme Pharma |
| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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