Correlation Between Medmen Enterprises and Guardion Health
Can any of the company-specific risk be diversified away by investing in both Medmen Enterprises and Guardion 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 Medmen Enterprises and Guardion Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medmen Enterprises Class and Guardion Health Sciences, you can compare the effects of market volatilities on Medmen Enterprises and Guardion 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 Medmen Enterprises with a short position of Guardion Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medmen Enterprises and Guardion Health.
Diversification Opportunities for Medmen Enterprises and Guardion Health
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medmen and Guardion is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Medmen Enterprises Class and Guardion Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardion Health Sciences and Medmen Enterprises 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 Medmen Enterprises Class are associated (or correlated) with Guardion Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardion Health Sciences has no effect on the direction of Medmen Enterprises i.e., Medmen Enterprises and Guardion Health go up and down completely randomly.
Pair Corralation between Medmen Enterprises and Guardion Health
Assuming the 90 days horizon Medmen Enterprises Class is expected to generate 8.04 times more return on investment than Guardion Health. However, Medmen Enterprises is 8.04 times more volatile than Guardion Health Sciences. It trades about 0.03 of its potential returns per unit of risk. Guardion Health Sciences is currently generating about 0.03 per unit of risk. If you would invest 3.60 in Medmen Enterprises Class on August 25, 2024 and sell it today you would lose (3.59) from holding Medmen Enterprises Class or give up 99.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.23% |
| Values | Daily Returns |
Medmen Enterprises Class vs. Guardion Health Sciences
Performance |
| Timeline |
| Medmen Enterprises Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guardion Health Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Medmen Enterprises and Guardion Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medmen Enterprises and Guardion Health
The main advantage of trading using opposite Medmen Enterprises and Guardion Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medmen Enterprises position performs unexpectedly, Guardion 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 Guardion Health will offset losses from the drop in Guardion Health's long position.| Medmen Enterprises vs. Curaleaf Holdings | Medmen Enterprises vs. Green Thumb Industries | Medmen Enterprises vs. Trulieve Cannabis Corp | Medmen Enterprises vs. Verano Holdings Corp |
| Guardion Health vs. Biofrontera | Guardion Health vs. Shuttle Pharmaceuticals | Guardion Health vs. Akanda Corp | Guardion Health vs. China Pharma Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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