Correlation Between Green Thumb and AYR Strategies
Can any of the company-specific risk be diversified away by investing in both Green Thumb and AYR Strategies 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 AYR Strategies 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 AYR Strategies Class, you can compare the effects of market volatilities on Green Thumb and AYR Strategies 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 AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and AYR Strategies.
Diversification Opportunities for Green Thumb and AYR Strategies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Green and AYR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Green Thumb Industries and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class 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 AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of Green Thumb i.e., Green Thumb and AYR Strategies go up and down completely randomly.
Pair Corralation between Green Thumb and AYR Strategies
Assuming the 90 days horizon Green Thumb is expected to generate 3.24 times less return on investment than AYR Strategies. But when comparing it to its historical volatility, Green Thumb Industries is 2.01 times less risky than AYR Strategies. It trades about 0.01 of its potential returns per unit of risk. AYR Strategies Class is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 131.00 in AYR Strategies Class on November 2, 2024 and sell it today you would lose (83.00) from holding AYR Strategies Class or give up 63.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Green Thumb Industries vs. AYR Strategies Class
Performance |
| Timeline |
| Green Thumb Industries |
| AYR Strategies Class |
Green Thumb and AYR Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Thumb and AYR Strategies
The main advantage of trading using opposite Green Thumb and AYR Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, AYR Strategies 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 AYR Strategies will offset losses from the drop in AYR Strategies' long position.| Green Thumb vs. Curaleaf Holdings | Green Thumb vs. Trulieve Cannabis Corp | Green Thumb vs. Cresco Labs | Green Thumb vs. GrowGeneration Corp |
| AYR Strategies vs. Green Thumb Industries | AYR Strategies vs. Trulieve Cannabis Corp | AYR Strategies vs. Goodness Growth Holdings | AYR Strategies vs. Verano Holdings Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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