Correlation Between Greenlane Holdings and 22nd Century
Can any of the company-specific risk be diversified away by investing in both Greenlane Holdings and 22nd Century 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 22nd Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlane Holdings and 22nd Century Group, you can compare the effects of market volatilities on Greenlane Holdings and 22nd Century 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 22nd Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlane Holdings and 22nd Century.
Diversification Opportunities for Greenlane Holdings and 22nd Century
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greenlane and 22nd is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Holdings and 22nd Century Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 22nd Century Group 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 22nd Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 22nd Century Group has no effect on the direction of Greenlane Holdings i.e., Greenlane Holdings and 22nd Century go up and down completely randomly.
Pair Corralation between Greenlane Holdings and 22nd Century
Given the investment horizon of 90 days Greenlane Holdings is expected to under-perform the 22nd Century. But the stock apears to be less risky and, when comparing its historical volatility, Greenlane Holdings is 1.67 times less risky than 22nd Century. The stock trades about -0.58 of its potential returns per unit of risk. The 22nd Century Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in 22nd Century Group on August 28, 2024 and sell it today you would earn a total of 0.00 from holding 22nd Century Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlane Holdings vs. 22nd Century Group
Performance |
| Timeline |
| Greenlane Holdings |
| 22nd Century Group |
Greenlane Holdings and 22nd Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlane Holdings and 22nd Century
The main advantage of trading using opposite Greenlane Holdings and 22nd Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlane Holdings position performs unexpectedly, 22nd Century 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 22nd Century will offset losses from the drop in 22nd Century's long position.| Greenlane Holdings vs. Steven Madden | Greenlane Holdings vs. Vera Bradley | Greenlane Holdings vs. Caleres | Greenlane Holdings vs. Rocky Brands |
| 22nd Century vs. Turning Point Brands | 22nd Century vs. Green Globe International | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. Kaival Brands Innovations |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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