Correlation Between GrowGeneration Corp and Fitell Ordinary
Can any of the company-specific risk be diversified away by investing in both GrowGeneration Corp and Fitell Ordinary 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 GrowGeneration Corp and Fitell Ordinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrowGeneration Corp and Fitell Ordinary, you can compare the effects of market volatilities on GrowGeneration Corp and Fitell Ordinary 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 GrowGeneration Corp with a short position of Fitell Ordinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrowGeneration Corp and Fitell Ordinary.
Diversification Opportunities for GrowGeneration Corp and Fitell Ordinary
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GrowGeneration and Fitell is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GrowGeneration Corp and Fitell Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitell Ordinary and GrowGeneration Corp 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 GrowGeneration Corp are associated (or correlated) with Fitell Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitell Ordinary has no effect on the direction of GrowGeneration Corp i.e., GrowGeneration Corp and Fitell Ordinary go up and down completely randomly.
Pair Corralation between GrowGeneration Corp and Fitell Ordinary
Given the investment horizon of 90 days GrowGeneration Corp is expected to generate 0.21 times more return on investment than Fitell Ordinary. However, GrowGeneration Corp is 4.69 times less risky than Fitell Ordinary. It trades about -0.15 of its potential returns per unit of risk. Fitell Ordinary is currently generating about -0.44 per unit of risk. If you would invest 142.00 in GrowGeneration Corp on November 29, 2024 and sell it today you would lose (20.00) from holding GrowGeneration Corp or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrowGeneration Corp vs. Fitell Ordinary
Performance |
| Timeline |
| GrowGeneration Corp |
| Fitell Ordinary |
GrowGeneration Corp and Fitell Ordinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrowGeneration Corp and Fitell Ordinary
The main advantage of trading using opposite GrowGeneration Corp and Fitell Ordinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrowGeneration Corp position performs unexpectedly, Fitell Ordinary 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 Fitell Ordinary will offset losses from the drop in Fitell Ordinary's long position.| GrowGeneration Corp vs. Evgo Inc | GrowGeneration Corp vs. Ulta Beauty | GrowGeneration Corp vs. Best Buy Co | GrowGeneration Corp vs. RH |
| Fitell Ordinary vs. Mesa Air Group | Fitell Ordinary vs. Interra Copper Corp | Fitell Ordinary vs. Azul SA | Fitell Ordinary vs. Allegiant Travel |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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