Correlation Between Trulieve Cannabis and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Trulieve Cannabis and Cresco Labs 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 Trulieve Cannabis and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trulieve Cannabis Corp and Cresco Labs, you can compare the effects of market volatilities on Trulieve Cannabis and Cresco Labs 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 Trulieve Cannabis with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trulieve Cannabis and Cresco Labs.
Diversification Opportunities for Trulieve Cannabis and Cresco Labs
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trulieve and Cresco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Trulieve Cannabis Corp and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and Trulieve Cannabis 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 Trulieve Cannabis Corp are associated (or correlated) with Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Trulieve Cannabis i.e., Trulieve Cannabis and Cresco Labs go up and down completely randomly.
Pair Corralation between Trulieve Cannabis and Cresco Labs
Assuming the 90 days horizon Trulieve Cannabis Corp is expected to generate 1.44 times more return on investment than Cresco Labs. However, Trulieve Cannabis is 1.44 times more volatile than Cresco Labs. It trades about 0.05 of its potential returns per unit of risk. Cresco Labs is currently generating about 0.05 per unit of risk. If you would invest 484.00 in Trulieve Cannabis Corp on October 22, 2024 and sell it today you would earn a total of 13.00 from holding Trulieve Cannabis Corp or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trulieve Cannabis Corp vs. Cresco Labs
Performance |
| Timeline |
| Trulieve Cannabis Corp |
| Cresco Labs |
Trulieve Cannabis and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trulieve Cannabis and Cresco Labs
The main advantage of trading using opposite Trulieve Cannabis and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trulieve Cannabis position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Trulieve Cannabis vs. Green Thumb Industries | Trulieve Cannabis vs. Curaleaf Holdings | Trulieve Cannabis vs. Cresco Labs | Trulieve Cannabis vs. GrowGeneration Corp |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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