Correlation Between Green Cures and Medipharm Labs
Can any of the company-specific risk be diversified away by investing in both Green Cures and Medipharm 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 Medipharm 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 Medipharm Labs Corp, you can compare the effects of market volatilities on Green Cures and Medipharm 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 Medipharm Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Medipharm Labs.
Diversification Opportunities for Green Cures and Medipharm Labs
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and Medipharm is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Medipharm Labs Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medipharm Labs Corp 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 Medipharm Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medipharm Labs Corp has no effect on the direction of Green Cures i.e., Green Cures and Medipharm Labs go up and down completely randomly.
Pair Corralation between Green Cures and Medipharm Labs
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 11.93 times more return on investment than Medipharm Labs. However, Green Cures is 11.93 times more volatile than Medipharm Labs Corp. It trades about 0.2 of its potential returns per unit of risk. Medipharm Labs Corp is currently generating about -0.01 per unit of risk. If you would invest 0.02 in Green Cures Botanical on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Green Cures Botanical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Medipharm Labs Corp
Performance |
| Timeline |
| Green Cures Botanical |
| Medipharm Labs Corp |
Green Cures and Medipharm Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Medipharm Labs
The main advantage of trading using opposite Green Cures and Medipharm Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Medipharm 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 Medipharm Labs will offset losses from the drop in Medipharm 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 |
| Medipharm Labs vs. Holloman Energy Corp | Medipharm Labs vs. cbdMD Inc | Medipharm Labs vs. Evolus Inc | Medipharm Labs vs. CV Sciences |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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