Correlation Between Growlife and Hemp
Can any of the company-specific risk be diversified away by investing in both Growlife and Hemp 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 Growlife and Hemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growlife and Hemp Inc, you can compare the effects of market volatilities on Growlife and Hemp 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 Growlife with a short position of Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growlife and Hemp.
Diversification Opportunities for Growlife and Hemp
Pay attention - limited upside
The 3 months correlation between Growlife and Hemp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Growlife and Hemp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemp Inc and Growlife 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 Growlife are associated (or correlated) with Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemp Inc has no effect on the direction of Growlife i.e., Growlife and Hemp go up and down completely randomly.
Pair Corralation between Growlife and Hemp
If you would invest 0.25 in Growlife on August 28, 2024 and sell it today you would lose (0.24) from holding Growlife or give up 96.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growlife vs. Hemp Inc
Performance |
| Timeline |
| Growlife |
| Hemp Inc |
Growlife and Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growlife and Hemp
The main advantage of trading using opposite Growlife and Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growlife position performs unexpectedly, Hemp 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 Hemp will offset losses from the drop in Hemp's long position.| Growlife vs. Element Solutions | Growlife vs. Orion Engineered Carbons | Growlife vs. Minerals Technologies | Growlife vs. Ingevity 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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