Correlation Between Goodness Growth and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both Goodness Growth and Curaleaf 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 Goodness Growth and Curaleaf Holdings 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 Curaleaf Holdings, you can compare the effects of market volatilities on Goodness Growth and Curaleaf 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 Goodness Growth with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodness Growth and Curaleaf Holdings.
Diversification Opportunities for Goodness Growth and Curaleaf Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goodness and Curaleaf is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goodness Growth Holdings and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings 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 Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of Goodness Growth i.e., Goodness Growth and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between Goodness Growth and Curaleaf Holdings
Assuming the 90 days horizon Goodness Growth Holdings is expected to generate 0.65 times more return on investment than Curaleaf Holdings. However, Goodness Growth Holdings is 1.53 times less risky than Curaleaf Holdings. It trades about -0.13 of its potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.18 per unit of risk. If you would invest 45.00 in Goodness Growth Holdings on August 28, 2024 and sell it today you would lose (10.00) from holding Goodness Growth Holdings or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goodness Growth Holdings vs. Curaleaf Holdings
Performance |
| Timeline |
| Goodness Growth Holdings |
| Curaleaf Holdings |
Goodness Growth and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodness Growth and Curaleaf Holdings
The main advantage of trading using opposite Goodness Growth and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodness Growth position performs unexpectedly, Curaleaf 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' 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 |
| Curaleaf Holdings vs. Green Thumb Industries | Curaleaf Holdings vs. Cresco Labs | Curaleaf Holdings vs. Trulieve Cannabis Corp | Curaleaf Holdings vs. Cronos Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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