Correlation Between Vext Science and Lowell Farms
Can any of the company-specific risk be diversified away by investing in both Vext Science and Lowell Farms 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 Vext Science and Lowell Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vext Science and Lowell Farms, you can compare the effects of market volatilities on Vext Science and Lowell Farms 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 Vext Science with a short position of Lowell Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vext Science and Lowell Farms.
Diversification Opportunities for Vext Science and Lowell Farms
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vext and Lowell is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vext Science and Lowell Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowell Farms and Vext Science 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 Vext Science are associated (or correlated) with Lowell Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowell Farms has no effect on the direction of Vext Science i.e., Vext Science and Lowell Farms go up and down completely randomly.
Pair Corralation between Vext Science and Lowell Farms
Assuming the 90 days horizon Vext Science is expected to under-perform the Lowell Farms. But the otc stock apears to be less risky and, when comparing its historical volatility, Vext Science is 2.46 times less risky than Lowell Farms. The otc stock trades about -0.03 of its potential returns per unit of risk. The Lowell Farms is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Lowell Farms on October 22, 2024 and sell it today you would earn a total of 0.00 from holding Lowell Farms or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Vext Science vs. Lowell Farms
Performance |
| Timeline |
| Vext Science |
| Lowell Farms |
Vext Science and Lowell Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vext Science and Lowell Farms
The main advantage of trading using opposite Vext Science and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vext Science position performs unexpectedly, Lowell Farms 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 Lowell Farms will offset losses from the drop in Lowell Farms' long position.| Vext Science vs. Decibel Cannabis | Vext Science vs. Delta 9 Cannabis | Vext Science vs. Body and Mind | Vext Science vs. CLS Holdings USA |
| Lowell Farms vs. Medicine Man Technologies | Lowell Farms vs. Ascend Wellness Holdings | Lowell Farms vs. Goodness Growth Holdings | Lowell Farms vs. AYR Strategies Class |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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