Correlation Between China SXT and Flora Growth
Can any of the company-specific risk be diversified away by investing in both China SXT and Flora Growth 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 China SXT and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China SXT Pharmaceuticals and Flora Growth Corp, you can compare the effects of market volatilities on China SXT and Flora Growth 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 China SXT with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of China SXT and Flora Growth.
Diversification Opportunities for China SXT and Flora Growth
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Flora is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding China SXT Pharmaceuticals and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp and China SXT 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 China SXT Pharmaceuticals are associated (or correlated) with Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of China SXT i.e., China SXT and Flora Growth go up and down completely randomly.
Pair Corralation between China SXT and Flora Growth
Given the investment horizon of 90 days China SXT Pharmaceuticals is expected to under-perform the Flora Growth. In addition to that, China SXT is 1.04 times more volatile than Flora Growth Corp. It trades about -0.05 of its total potential returns per unit of risk. Flora Growth Corp is currently generating about 0.0 per unit of volatility. If you would invest 933.00 in Flora Growth Corp on August 26, 2024 and sell it today you would lose (790.00) from holding Flora Growth Corp or give up 84.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China SXT Pharmaceuticals vs. Flora Growth Corp
Performance |
| Timeline |
| China SXT Pharmaceuticals |
| Flora Growth Corp |
China SXT and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China SXT and Flora Growth
The main advantage of trading using opposite China SXT and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China SXT position performs unexpectedly, Flora Growth 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 Flora Growth will offset losses from the drop in Flora Growth's long position.| China SXT vs. Akanda Corp | China SXT vs. Petros Pharmaceuticals | China SXT vs. GelStat Corp | China SXT vs. Shuttle Pharmaceuticals |
| Flora Growth vs. Eliem Therapeutics | Flora Growth vs. HCW Biologics | Flora Growth vs. Scpharmaceuticals | Flora Growth vs. Milestone Pharmaceuticals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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