Correlation Between Grown Rogue and American Green
Can any of the company-specific risk be diversified away by investing in both Grown Rogue and American Green 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 Grown Rogue and American Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grown Rogue International and American Green, you can compare the effects of market volatilities on Grown Rogue and American Green 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 Grown Rogue with a short position of American Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grown Rogue and American Green.
Diversification Opportunities for Grown Rogue and American Green
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grown and American is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grown Rogue International and American Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Green and Grown Rogue 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 Grown Rogue International are associated (or correlated) with American Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Green has no effect on the direction of Grown Rogue i.e., Grown Rogue and American Green go up and down completely randomly.
Pair Corralation between Grown Rogue and American Green
Assuming the 90 days horizon Grown Rogue is expected to generate 2.67 times less return on investment than American Green. But when comparing it to its historical volatility, Grown Rogue International is 3.67 times less risky than American Green. It trades about 0.09 of its potential returns per unit of risk. American Green is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.12 in American Green on August 30, 2024 and sell it today you would lose (0.07) from holding American Green or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grown Rogue International vs. American Green
Performance |
| Timeline |
| Grown Rogue International |
| American Green |
Grown Rogue and American Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grown Rogue and American Green
The main advantage of trading using opposite Grown Rogue and American Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grown Rogue position performs unexpectedly, American Green 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 American Green will offset losses from the drop in American Green's long position.| Grown Rogue vs. Goodness Growth Holdings | Grown Rogue vs. C21 Investments | Grown Rogue vs. Delta 9 Cannabis | Grown Rogue vs. 4Front Ventures Corp |
| American Green vs. Greengro Tech | American Green vs. Growlife | American Green vs. Hemp Inc | American Green vs. Easton Pharmaceutica |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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