Correlation Between Lowell Farms and Vext Science
Can any of the company-specific risk be diversified away by investing in both Lowell Farms and Vext Science 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 Vext Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowell Farms and Vext Science, you can compare the effects of market volatilities on Lowell Farms and Vext Science 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 Vext Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowell Farms and Vext Science.
Diversification Opportunities for Lowell Farms and Vext Science
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowell and Vext is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lowell Farms and Vext Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vext Science 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 Vext Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vext Science has no effect on the direction of Lowell Farms i.e., Lowell Farms and Vext Science go up and down completely randomly.
Pair Corralation between Lowell Farms and Vext Science
Assuming the 90 days horizon Lowell Farms is expected to generate 3.91 times more return on investment than Vext Science. However, Lowell Farms is 3.91 times more volatile than Vext Science. It trades about 0.14 of its potential returns per unit of risk. Vext Science is currently generating about -0.04 per unit of risk. If you would invest 1.30 in Lowell Farms on August 29, 2024 and sell it today you would earn a total of 0.40 from holding Lowell Farms or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Lowell Farms vs. Vext Science
Performance |
| Timeline |
| Lowell Farms |
| Vext Science |
Lowell Farms and Vext Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowell Farms and Vext Science
The main advantage of trading using opposite Lowell Farms and Vext Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowell Farms position performs unexpectedly, Vext Science 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 Vext Science will offset losses from the drop in Vext Science'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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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