Correlation Between Lowell Farms and Green Cures
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and Green Cures 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 Green Cures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and Green Cures Botanical, you can compare the effects of market volatilities on Lowell Farms and Green Cures 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 Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and Green Cures.
Diversification Opportunities for Lowell Farms and Green Cures
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lowell and Green is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical 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 Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of Lowell Farms i.e., Lowell Farms and Green Cures go up and down completely randomly.
Pair Corralation between Lowell Farms and Green Cures
Assuming the 90 days horizon Lowell Farms is expected to generate 8.21 times less return on investment than Green Cures. But when comparing it to its historical volatility, Lowell Farms is 3.15 times less risky than Green Cures. It trades about 0.06 of its potential returns per unit of risk. Green Cures Botanical is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Green Cures Botanical on August 29, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lowell Farms vs. Green Cures Botanical
Performance |
| Timeline |
| Lowell Farms |
| Green Cures Botanical |
Lowell Farms and Green Cures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowell Farms and Green Cures
The main advantage of trading using opposite Lowell Farms and Green Cures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, Green Cures 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 Green Cures will offset losses from the drop in Green Cures' 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 |
| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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