Correlation Between StateHouse Holdings and American Green
Can any of the company-specific risk be diversified away by investing in both StateHouse Holdings and American Green 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 StateHouse Holdings and American Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StateHouse Holdings and American Green, you can compare the effects of market volatilities on StateHouse Holdings and American Green 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 StateHouse Holdings with a short position of American Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of StateHouse Holdings and American Green.
Diversification Opportunities for StateHouse Holdings and American Green
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between StateHouse and American is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding StateHouse Holdings and American Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Green and StateHouse Holdings 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 StateHouse Holdings are associated (or correlated) with American Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Green has no effect on the direction of StateHouse Holdings i.e., StateHouse Holdings and American Green go up and down completely randomly.
Pair Corralation between StateHouse Holdings and American Green
Assuming the 90 days horizon StateHouse Holdings is expected to generate 6.34 times more return on investment than American Green. However, StateHouse Holdings is 6.34 times more volatile than American Green. It trades about 0.12 of its potential returns per unit of risk. American Green is currently generating about 0.11 per unit of risk. If you would invest 2.00 in StateHouse Holdings on September 1, 2024 and sell it today you would lose (0.50) from holding StateHouse Holdings or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StateHouse Holdings vs. American Green
Performance |
| Timeline |
| StateHouse Holdings |
| American Green |
StateHouse Holdings and American Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StateHouse Holdings and American Green
The main advantage of trading using opposite StateHouse Holdings and American Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StateHouse Holdings position performs unexpectedly, American Green 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 American Green will offset losses from the drop in American Green's long position.| StateHouse Holdings vs. Benchmark Botanics | StateHouse Holdings vs. Speakeasy Cannabis Club | StateHouse Holdings vs. City View Green | StateHouse Holdings vs. BC Craft Supply |
| American Green vs. Greengro Tech | American Green vs. Growlife | American Green vs. Hemp Inc | American Green vs. Easton Pharmaceutica |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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