Correlation Between Lowell Farms and Bionoid Pharma
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and Bionoid Pharma 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 Lowell Farms and Bionoid Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and Bionoid Pharma, you can compare the effects of market volatilities on Lowell Farms and Bionoid Pharma 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 Lowell Farms with a short position of Bionoid Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and Bionoid Pharma.
Diversification Opportunities for Lowell Farms and Bionoid Pharma
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lowell and Bionoid is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and Bionoid Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionoid Pharma and Lowell Farms 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 Lowell Farms are associated (or correlated) with Bionoid Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionoid Pharma has no effect on the direction of Lowell Farms i.e., Lowell Farms and Bionoid Pharma go up and down completely randomly.
Pair Corralation between Lowell Farms and Bionoid Pharma
Assuming the 90 days horizon Lowell Farms is expected to generate 2.98 times less return on investment than Bionoid Pharma. But when comparing it to its historical volatility, Lowell Farms is 1.26 times less risky than Bionoid Pharma. It trades about 0.03 of its potential returns per unit of risk. Bionoid Pharma is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Bionoid Pharma on August 25, 2024 and sell it today you would lose (5.00) from holding Bionoid Pharma or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowell Farms vs. Bionoid Pharma
Performance |
| Timeline |
| Lowell Farms |
| Bionoid Pharma |
Lowell Farms and Bionoid Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowell Farms and Bionoid Pharma
The main advantage of trading using opposite Lowell Farms and Bionoid Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, Bionoid Pharma 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 Bionoid Pharma will offset losses from the drop in Bionoid Pharma's long position.| Lowell Farms vs. Green Cures Botanical | Lowell Farms vs. Galexxy Holdings | Lowell Farms vs. Indoor Harvest Corp | Lowell Farms vs. Speakeasy Cannabis Club |
| Bionoid Pharma vs. Aerofoam Metals | Bionoid Pharma vs. Zijin Mining Group | Bionoid Pharma vs. Bridgford Foods | Bionoid Pharma vs. Hf Foods Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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