Correlation Between Flora Growth and Rxsight
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Rxsight 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 Rxsight 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 Rxsight, you can compare the effects of market volatilities on Flora Growth and Rxsight 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 Rxsight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Rxsight.
Diversification Opportunities for Flora Growth and Rxsight
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flora and Rxsight is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Rxsight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rxsight 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 Rxsight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rxsight has no effect on the direction of Flora Growth i.e., Flora Growth and Rxsight go up and down completely randomly.
Pair Corralation between Flora Growth and Rxsight
Given the investment horizon of 90 days Flora Growth Corp is expected to under-perform the Rxsight. In addition to that, Flora Growth is 2.56 times more volatile than Rxsight. It trades about -0.01 of its total potential returns per unit of risk. Rxsight is currently generating about 0.07 per unit of volatility. If you would invest 1,376 in Rxsight on November 9, 2024 and sell it today you would earn a total of 1,981 from holding Rxsight or generate 143.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flora Growth Corp vs. Rxsight
Performance |
| Timeline |
| Flora Growth Corp |
| Rxsight |
Flora Growth and Rxsight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Rxsight
The main advantage of trading using opposite Flora Growth and Rxsight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Rxsight 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 Rxsight will offset losses from the drop in Rxsight's long position.| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
| Rxsight vs. Axogen Inc | Rxsight vs. Treace Medical Concepts | Rxsight vs. Pulmonx Corp | Rxsight vs. Orthofix Medical |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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