Correlation Between Verano Holdings and BZAM
Can any of the company-specific risk be diversified away by investing in both Verano Holdings and BZAM 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 Verano Holdings and BZAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verano Holdings Corp and BZAM, you can compare the effects of market volatilities on Verano Holdings and BZAM 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 Verano Holdings with a short position of BZAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verano Holdings and BZAM.
Diversification Opportunities for Verano Holdings and BZAM
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Verano and BZAM is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Verano Holdings Corp and BZAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BZAM and Verano 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 Verano Holdings Corp are associated (or correlated) with BZAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BZAM has no effect on the direction of Verano Holdings i.e., Verano Holdings and BZAM go up and down completely randomly.
Pair Corralation between Verano Holdings and BZAM
Assuming the 90 days horizon Verano Holdings Corp is expected to under-perform the BZAM. But the otc stock apears to be less risky and, when comparing its historical volatility, Verano Holdings Corp is 30.78 times less risky than BZAM. The otc stock trades about -0.36 of its potential returns per unit of risk. The BZAM is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 0.00 in BZAM on August 28, 2024 and sell it today you would earn a total of 1.00 from holding BZAM or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Verano Holdings Corp vs. BZAM
Performance |
| Timeline |
| Verano Holdings Corp |
| BZAM |
Verano Holdings and BZAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verano Holdings and BZAM
The main advantage of trading using opposite Verano Holdings and BZAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verano Holdings position performs unexpectedly, BZAM 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 BZAM will offset losses from the drop in BZAM's long position.| Verano Holdings vs. Cresco Labs | Verano Holdings vs. AYR Strategies Class | Verano Holdings vs. Green Thumb Industries | Verano Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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