Correlation Between Lowell Farms and Entourage Health
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and Entourage Health 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 Entourage Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and Entourage Health Corp, you can compare the effects of market volatilities on Lowell Farms and Entourage Health 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 Entourage Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and Entourage Health.
Diversification Opportunities for Lowell Farms and Entourage Health
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowell and Entourage is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp 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 Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Lowell Farms i.e., Lowell Farms and Entourage Health go up and down completely randomly.
Pair Corralation between Lowell Farms and Entourage Health
Assuming the 90 days horizon Lowell Farms is expected to generate 1.58 times more return on investment than Entourage Health. However, Lowell Farms is 1.58 times more volatile than Entourage Health Corp. It trades about 0.1 of its potential returns per unit of risk. Entourage Health Corp is currently generating about 0.05 per unit of risk. If you would invest 6.74 in Lowell Farms on September 1, 2024 and sell it today you would lose (5.14) from holding Lowell Farms or give up 76.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowell Farms vs. Entourage Health Corp
Performance |
| Timeline |
| Lowell Farms |
| Entourage Health Corp |
Lowell Farms and Entourage Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowell Farms and Entourage Health
The main advantage of trading using opposite Lowell Farms and Entourage Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, Entourage Health 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 Entourage Health will offset losses from the drop in Entourage Health'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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