Correlation Between CbdMD and Goodness Growth
Can any of the company-specific risk be diversified away by investing in both CbdMD and Goodness 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 CbdMD and Goodness Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and Goodness Growth Holdings, you can compare the effects of market volatilities on CbdMD and Goodness 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 CbdMD with a short position of Goodness Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Goodness Growth.
Diversification Opportunities for CbdMD and Goodness Growth
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CbdMD and Goodness is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings and CbdMD 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 cbdMD Inc are associated (or correlated) with Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of CbdMD i.e., CbdMD and Goodness Growth go up and down completely randomly.
Pair Corralation between CbdMD and Goodness Growth
Given the investment horizon of 90 days cbdMD Inc is expected to generate 0.85 times more return on investment than Goodness Growth. However, cbdMD Inc is 1.17 times less risky than Goodness Growth. It trades about 0.01 of its potential returns per unit of risk. Goodness Growth Holdings is currently generating about -0.13 per unit of risk. If you would invest 50.00 in cbdMD Inc on August 31, 2024 and sell it today you would lose (1.00) from holding cbdMD Inc or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cbdMD Inc vs. Goodness Growth Holdings
Performance |
| Timeline |
| cbdMD Inc |
| Goodness Growth Holdings |
CbdMD and Goodness Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and Goodness Growth
The main advantage of trading using opposite CbdMD and Goodness Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, Goodness 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 Goodness Growth will offset losses from the drop in Goodness Growth's long position.| CbdMD vs. CV Sciences | CbdMD vs. Trulieve Cannabis Corp | CbdMD vs. Curaleaf Holdings | CbdMD vs. Green Thumb Industries |
| Goodness Growth vs. Holloman Energy Corp | Goodness Growth vs. cbdMD Inc | Goodness Growth vs. Evolus Inc | Goodness Growth vs. CV Sciences |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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