Correlation Between Green Thumb and AdvisorShares Pure
Can any of the company-specific risk be diversified away by investing in both Green Thumb and AdvisorShares Pure 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 AdvisorShares Pure 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 AdvisorShares Pure Cannabis, you can compare the effects of market volatilities on Green Thumb and AdvisorShares Pure 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 AdvisorShares Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and AdvisorShares Pure.
Diversification Opportunities for Green Thumb and AdvisorShares Pure
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and AdvisorShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Green Thumb Industries and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of Green Thumb i.e., Green Thumb and AdvisorShares Pure go up and down completely randomly.
Pair Corralation between Green Thumb and AdvisorShares Pure
Assuming the 90 days horizon Green Thumb Industries is expected to generate 0.72 times more return on investment than AdvisorShares Pure. However, Green Thumb Industries is 1.39 times less risky than AdvisorShares Pure. It trades about -0.12 of its potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about -0.23 per unit of risk. If you would invest 1,143 in Green Thumb Industries on August 24, 2024 and sell it today you would lose (215.00) from holding Green Thumb Industries or give up 18.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Thumb Industries vs. AdvisorShares Pure Cannabis
Performance |
| Timeline |
| Green Thumb Industries |
| AdvisorShares Pure |
Green Thumb and AdvisorShares Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Thumb and AdvisorShares Pure
The main advantage of trading using opposite Green Thumb and AdvisorShares Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, AdvisorShares Pure 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 AdvisorShares Pure will offset losses from the drop in AdvisorShares Pure's long position.| Green Thumb vs. Holloman Energy Corp | Green Thumb vs. cbdMD Inc | Green Thumb vs. Evolus Inc | Green Thumb vs. CV Sciences |
| AdvisorShares Pure vs. AdvisorShares Pure Cannabis | AdvisorShares Pure vs. Trulieve Cannabis Corp | AdvisorShares Pure vs. Green Thumb Industries | AdvisorShares Pure vs. Amplify Seymour Cannabis |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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