Correlation Between Green Thumb and Acreage Holdings
Can any of the company-specific risk be diversified away by investing in both Green Thumb and Acreage Holdings 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 Thumb and Acreage Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Thumb Industries and Acreage Holdings, you can compare the effects of market volatilities on Green Thumb and Acreage Holdings 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 Thumb with a short position of Acreage Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and Acreage Holdings.
Diversification Opportunities for Green Thumb and Acreage Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Acreage is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Green Thumb Industries and Acreage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acreage Holdings and Green Thumb 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 Thumb Industries are associated (or correlated) with Acreage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acreage Holdings has no effect on the direction of Green Thumb i.e., Green Thumb and Acreage Holdings go up and down completely randomly.
Pair Corralation between Green Thumb and Acreage Holdings
Assuming the 90 days horizon Green Thumb Industries is expected to generate 0.33 times more return on investment than Acreage Holdings. However, Green Thumb Industries is 3.03 times less risky than Acreage Holdings. It trades about -0.04 of its potential returns per unit of risk. Acreage Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,215 in Green Thumb Industries on September 5, 2024 and sell it today you would lose (289.00) from holding Green Thumb Industries or give up 23.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Thumb Industries vs. Acreage Holdings
Performance |
| Timeline |
| Green Thumb Industries |
| Acreage Holdings |
Green Thumb and Acreage Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Thumb and Acreage Holdings
The main advantage of trading using opposite Green Thumb and Acreage Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, Acreage Holdings 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 Acreage Holdings will offset losses from the drop in Acreage Holdings' long position.| Green Thumb vs. Curaleaf Holdings | Green Thumb vs. Trulieve Cannabis Corp | Green Thumb vs. Cresco Labs | Green Thumb vs. GrowGeneration Corp |
| Acreage Holdings vs. Verano Holdings Corp | Acreage Holdings vs. Ascend Wellness Holdings | Acreage Holdings vs. Green Thumb Industries | Acreage Holdings vs. Slang Worldwide |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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