Correlation Between Flora Growth and Zomedica Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Flora Growth and Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals Corp, you can compare the effects of market volatilities on Flora Growth and Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flora Growth and Zomedica Pharmaceuticals.
Diversification Opportunities for Flora Growth and Zomedica Pharmaceuticals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flora and Zomedica is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Zomedica Pharmaceuticals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zomedica Pharmaceuticals has no effect on the direction of Flora Growth i.e., Flora Growth and Zomedica Pharmaceuticals go up and down completely randomly.
Pair Corralation between Flora Growth and Zomedica Pharmaceuticals
Given the investment horizon of 90 days Flora Growth Corp is expected to generate 4.14 times more return on investment than Zomedica Pharmaceuticals. However, Flora Growth is 4.14 times more volatile than Zomedica Pharmaceuticals Corp. It trades about 0.1 of its potential returns per unit of risk. Zomedica Pharmaceuticals Corp is currently generating about -0.4 per unit of risk. If you would invest 113.00 in Flora Growth Corp on September 14, 2024 and sell it today you would earn a total of 12.50 from holding Flora Growth Corp or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flora Growth Corp vs. Zomedica Pharmaceuticals Corp
Performance |
| Timeline |
| Flora Growth Corp |
| Zomedica Pharmaceuticals |
Flora Growth and Zomedica Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flora Growth and Zomedica Pharmaceuticals
The main advantage of trading using opposite Flora Growth and Zomedica Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flora Growth position performs unexpectedly, Zomedica Pharmaceuticals 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 Zomedica Pharmaceuticals will offset losses from the drop in Zomedica Pharmaceuticals' long position.| Flora Growth vs. Puma Biotechnology | Flora Growth vs. Iovance Biotherapeutics | Flora Growth vs. Day One Biopharmaceuticals | Flora Growth vs. Inozyme Pharma |
| Zomedica Pharmaceuticals vs. Tilray Inc | Zomedica Pharmaceuticals vs. Aurora Cannabis | Zomedica Pharmaceuticals vs. Canopy Growth Corp | Zomedica Pharmaceuticals vs. OrganiGram Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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