Correlation Between GrowGeneration Corp and Green Thumb
Can any of the company-specific risk be diversified away by investing in both GrowGeneration Corp and Green Thumb 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 Green Thumb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrowGeneration Corp and Green Thumb Industries, you can compare the effects of market volatilities on GrowGeneration Corp and Green Thumb 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 Green Thumb. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrowGeneration Corp and Green Thumb.
Diversification Opportunities for GrowGeneration Corp and Green Thumb
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GrowGeneration and Green is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GrowGeneration Corp and Green Thumb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Thumb Industries 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 Green Thumb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Thumb Industries has no effect on the direction of GrowGeneration Corp i.e., GrowGeneration Corp and Green Thumb go up and down completely randomly.
Pair Corralation between GrowGeneration Corp and Green Thumb
Given the investment horizon of 90 days GrowGeneration Corp is expected to under-perform the Green Thumb. In addition to that, GrowGeneration Corp is 1.26 times more volatile than Green Thumb Industries. It trades about -0.02 of its total potential returns per unit of risk. Green Thumb Industries is currently generating about 0.0 per unit of volatility. If you would invest 1,277 in Green Thumb Industries on August 28, 2024 and sell it today you would lose (376.00) from holding Green Thumb Industries or give up 29.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrowGeneration Corp vs. Green Thumb Industries
Performance |
| Timeline |
| GrowGeneration Corp |
| Green Thumb Industries |
GrowGeneration Corp and Green Thumb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrowGeneration Corp and Green Thumb
The main advantage of trading using opposite GrowGeneration Corp and Green Thumb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrowGeneration Corp position performs unexpectedly, Green Thumb 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 Green Thumb will offset losses from the drop in Green Thumb's long position.| GrowGeneration Corp vs. Evgo Inc | GrowGeneration Corp vs. Ulta Beauty | GrowGeneration Corp vs. Best Buy Co | GrowGeneration Corp vs. RH |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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