Correlation Between Medicine Man and Green Thumb
Can any of the company-specific risk be diversified away by investing in both Medicine Man and Green Thumb 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 Medicine Man and Green Thumb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicine Man Technologies and Green Thumb Industries, you can compare the effects of market volatilities on Medicine Man and Green Thumb 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 Medicine Man with a short position of Green Thumb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicine Man and Green Thumb.
Diversification Opportunities for Medicine Man and Green Thumb
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medicine and Green is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Medicine Man Technologies and Green Thumb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Thumb Industries and Medicine Man 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 Medicine Man Technologies are associated (or correlated) with Green Thumb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Thumb Industries has no effect on the direction of Medicine Man i.e., Medicine Man and Green Thumb go up and down completely randomly.
Pair Corralation between Medicine Man and Green Thumb
Given the investment horizon of 90 days Medicine Man Technologies is expected to generate 8.78 times more return on investment than Green Thumb. However, Medicine Man is 8.78 times more volatile than Green Thumb Industries. It trades about 0.11 of its potential returns per unit of risk. Green Thumb Industries is currently generating about -0.03 per unit of risk. If you would invest 45.00 in Medicine Man Technologies on August 28, 2024 and sell it today you would lose (34.00) from holding Medicine Man Technologies or give up 75.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Medicine Man Technologies vs. Green Thumb Industries
Performance |
| Timeline |
| Medicine Man Technologies |
| Green Thumb Industries |
Medicine Man and Green Thumb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicine Man and Green Thumb
The main advantage of trading using opposite Medicine Man and Green Thumb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicine Man position performs unexpectedly, Green Thumb 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 Thumb will offset losses from the drop in Green Thumb's long position.| Medicine Man vs. Lowell Farms | Medicine Man vs. AYR Strategies Class | Medicine Man vs. 4Front Ventures Corp | Medicine Man vs. Verano Holdings Corp |
| Green Thumb vs. Curaleaf Holdings | Green Thumb vs. Trulieve Cannabis Corp | Green Thumb vs. Cresco Labs | Green Thumb vs. GrowGeneration 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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