Correlation Between Goodness Growth and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Goodness Growth and Cresco Labs 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 Goodness Growth and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodness Growth Holdings and Cresco Labs, you can compare the effects of market volatilities on Goodness Growth and Cresco Labs 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 Goodness Growth with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodness Growth and Cresco Labs.
Diversification Opportunities for Goodness Growth and Cresco Labs
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goodness and Cresco is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Goodness Growth Holdings and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and Goodness 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 Goodness Growth Holdings are associated (or correlated) with Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Goodness Growth i.e., Goodness Growth and Cresco Labs go up and down completely randomly.
Pair Corralation between Goodness Growth and Cresco Labs
Assuming the 90 days horizon Goodness Growth Holdings is expected to under-perform the Cresco Labs. But the otc stock apears to be less risky and, when comparing its historical volatility, Goodness Growth Holdings is 1.03 times less risky than Cresco Labs. The otc stock trades about -0.2 of its potential returns per unit of risk. The Cresco Labs is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Cresco Labs on October 22, 2024 and sell it today you would earn a total of 2.00 from holding Cresco Labs or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodness Growth Holdings vs. Cresco Labs
Performance |
| Timeline |
| Goodness Growth Holdings |
| Cresco Labs |
Goodness Growth and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodness Growth and Cresco Labs
The main advantage of trading using opposite Goodness Growth and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodness Growth position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Goodness Growth vs. Verano Holdings Corp | Goodness Growth vs. Lowell Farms | Goodness Growth vs. Ascend Wellness Holdings | Goodness Growth vs. 4Front Ventures Corp |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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