Correlation Between Green Cures and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Green Cures 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 Green Cures and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cures Botanical and Cresco Labs, you can compare the effects of market volatilities on Green Cures 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 Green Cures with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Cresco Labs.
Diversification Opportunities for Green Cures and Cresco Labs
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Green and Cresco is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and Green Cures 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 Green Cures Botanical 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 Green Cures i.e., Green Cures and Cresco Labs go up and down completely randomly.
Pair Corralation between Green Cures and Cresco Labs
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 7.42 times more return on investment than Cresco Labs. However, Green Cures is 7.42 times more volatile than Cresco Labs. It trades about 0.17 of its potential returns per unit of risk. Cresco Labs is currently generating about 0.0 per unit of risk. If you would invest 0.08 in Green Cures Botanical on November 27, 2024 and sell it today you would lose (0.07) from holding Green Cures Botanical or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Green Cures Botanical vs. Cresco Labs
Performance |
| Timeline |
| Green Cures Botanical |
| Cresco Labs |
Green Cures and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Cresco Labs
The main advantage of trading using opposite Green Cures and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures 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.| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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