Correlation Between Greenlane Holdings and Flora Growth
Can any of the company-specific risk be diversified away by investing in both Greenlane Holdings and Flora Growth 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 Greenlane Holdings and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlane Holdings and Flora Growth Corp, you can compare the effects of market volatilities on Greenlane Holdings and Flora Growth 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 Greenlane Holdings with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlane Holdings and Flora Growth.
Diversification Opportunities for Greenlane Holdings and Flora Growth
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenlane and Flora is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Holdings and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp and Greenlane Holdings 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 Greenlane Holdings are associated (or correlated) with Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of Greenlane Holdings i.e., Greenlane Holdings and Flora Growth go up and down completely randomly.
Pair Corralation between Greenlane Holdings and Flora Growth
Given the investment horizon of 90 days Greenlane Holdings is expected to generate 2.23 times more return on investment than Flora Growth. However, Greenlane Holdings is 2.23 times more volatile than Flora Growth Corp. It trades about 0.01 of its potential returns per unit of risk. Flora Growth Corp is currently generating about 0.01 per unit of risk. If you would invest 3,850 in Greenlane Holdings on August 28, 2024 and sell it today you would lose (3,661) from holding Greenlane Holdings or give up 95.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlane Holdings vs. Flora Growth Corp
Performance |
| Timeline |
| Greenlane Holdings |
| Flora Growth Corp |
Greenlane Holdings and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlane Holdings and Flora Growth
The main advantage of trading using opposite Greenlane Holdings and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlane Holdings position performs unexpectedly, Flora Growth 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 Flora Growth will offset losses from the drop in Flora Growth's long position.| Greenlane Holdings vs. Steven Madden | Greenlane Holdings vs. Vera Bradley | Greenlane Holdings vs. Caleres | Greenlane Holdings vs. Rocky Brands |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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