Correlation Between Verano Holdings and Green Cures
Can any of the company-specific risk be diversified away by investing in both Verano Holdings and Green Cures 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 Green Cures 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 Green Cures Botanical, you can compare the effects of market volatilities on Verano Holdings and Green Cures 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 Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verano Holdings and Green Cures.
Diversification Opportunities for Verano Holdings and Green Cures
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Verano and Green is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Verano Holdings Corp and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical 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 Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of Verano Holdings i.e., Verano Holdings and Green Cures go up and down completely randomly.
Pair Corralation between Verano Holdings and Green Cures
Assuming the 90 days horizon Verano Holdings Corp is expected to under-perform the Green Cures. But the otc stock apears to be less risky and, when comparing its historical volatility, Verano Holdings Corp is 7.42 times less risky than Green Cures. The otc stock trades about -0.02 of its potential returns per unit of risk. The Green Cures Botanical is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.08 in Green Cures Botanical on August 28, 2024 and sell it today you would lose (0.06) from holding Green Cures Botanical or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verano Holdings Corp vs. Green Cures Botanical
Performance |
| Timeline |
| Verano Holdings Corp |
| Green Cures Botanical |
Verano Holdings and Green Cures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verano Holdings and Green Cures
The main advantage of trading using opposite Verano Holdings and Green Cures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verano Holdings position performs unexpectedly, Green Cures 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 Green Cures will offset losses from the drop in Green Cures' long position.| Verano Holdings vs. Cresco Labs | Verano Holdings vs. AYR Strategies Class | Verano Holdings vs. Green Thumb Industries | Verano Holdings vs. Marimed |
| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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