Correlation Between Lowell Farms and Goodness Growth
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and Goodness Growth 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 Goodness Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and Goodness Growth Holdings, you can compare the effects of market volatilities on Lowell Farms and Goodness Growth 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 Goodness Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and Goodness Growth.
Diversification Opportunities for Lowell Farms and Goodness Growth
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowell and Goodness is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings 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 Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of Lowell Farms i.e., Lowell Farms and Goodness Growth go up and down completely randomly.
Pair Corralation between Lowell Farms and Goodness Growth
Assuming the 90 days horizon Lowell Farms is expected to generate 2.58 times more return on investment than Goodness Growth. However, Lowell Farms is 2.58 times more volatile than Goodness Growth Holdings. It trades about 0.06 of its potential returns per unit of risk. Goodness Growth Holdings is currently generating about -0.09 per unit of risk. If you would invest 1.80 in Lowell Farms on August 30, 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lowell Farms vs. Goodness Growth Holdings
Performance |
Timeline |
Lowell Farms |
Goodness Growth Holdings |
Lowell Farms and Goodness Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lowell Farms and Goodness Growth
The main advantage of trading using opposite Lowell Farms and Goodness Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, Goodness Growth 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 Goodness Growth will offset losses from the drop in Goodness Growth'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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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