Correlation Between Lowell Farms and CTT Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and CTT Pharmaceutical 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 CTT Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and CTT Pharmaceutical Holdings, you can compare the effects of market volatilities on Lowell Farms and CTT Pharmaceutical 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 CTT Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and CTT Pharmaceutical.
Diversification Opportunities for Lowell Farms and CTT Pharmaceutical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lowell and CTT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and CTT Pharmaceutical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Pharmaceutical 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 CTT Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Pharmaceutical has no effect on the direction of Lowell Farms i.e., Lowell Farms and CTT Pharmaceutical go up and down completely randomly.
Pair Corralation between Lowell Farms and CTT Pharmaceutical
Assuming the 90 days horizon Lowell Farms is expected to generate 3.16 times more return on investment than CTT Pharmaceutical. However, Lowell Farms is 3.16 times more volatile than CTT Pharmaceutical Holdings. It trades about 0.06 of its potential returns per unit of risk. CTT Pharmaceutical Holdings is currently generating about -0.01 per unit of risk. If you would invest 1.80 in Lowell Farms on August 29, 2024 and sell it today you would lose (0.10) from holding Lowell Farms or give up 5.56% 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. CTT Pharmaceutical Holdings
Performance |
| Timeline |
| Lowell Farms |
| CTT Pharmaceutical |
Lowell Farms and CTT Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowell Farms and CTT Pharmaceutical
The main advantage of trading using opposite Lowell Farms and CTT Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, CTT Pharmaceutical 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 CTT Pharmaceutical will offset losses from the drop in CTT Pharmaceutical's long position.| Lowell Farms vs. Medicine Man Technologies | Lowell Farms vs. Ascend Wellness Holdings | Lowell Farms vs. Goodness Growth Holdings | Lowell Farms vs. AYR Strategies Class |
| CTT Pharmaceutical vs. PayPal Holdings | CTT Pharmaceutical vs. Nasdaq Inc | CTT Pharmaceutical vs. Choice Hotels International | CTT Pharmaceutical vs. Microsoft |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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