Correlation Between Green Thumb and Body

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Can any of the company-specific risk be diversified away by investing in both Green Thumb and Body 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 Body 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 Body and Mind, you can compare the effects of market volatilities on Green Thumb and Body 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 Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and Body.

Diversification Opportunities for Green Thumb and Body

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Green and Body is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Green Thumb Industries and Body and Mind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Body and Mind 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 Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Body and Mind has no effect on the direction of Green Thumb i.e., Green Thumb and Body go up and down completely randomly.

Pair Corralation between Green Thumb and Body

Assuming the 90 days horizon Green Thumb Industries is expected to generate 0.59 times more return on investment than Body. However, Green Thumb Industries is 1.69 times less risky than Body. It trades about -0.09 of its potential returns per unit of risk. Body and Mind is currently generating about -0.25 per unit of risk. If you would invest  1,067  in Green Thumb Industries on August 29, 2024 and sell it today you would lose (166.00) from holding Green Thumb Industries or give up 15.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Green Thumb Industries  vs.  Body and Mind

 Performance 
       Timeline  
Green Thumb Industries 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Green Thumb Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Green Thumb is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Body and Mind 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Body and Mind has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's primary indicators remain relatively steady which may send shares a bit higher in December 2024. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Green Thumb and Body Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Green Thumb and Body

The main advantage of trading using opposite Green Thumb and Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, Body 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 Body will offset losses from the drop in Body's long position.
The idea behind Green Thumb Industries and Body and Mind pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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