Correlation Between Cardio Diagnostics and Flora Growth

Can any of the company-specific risk be diversified away by investing in both Cardio Diagnostics and Flora 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 Cardio Diagnostics and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardio Diagnostics Holdings and Flora Growth Corp, you can compare the effects of market volatilities on Cardio Diagnostics and Flora 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 Cardio Diagnostics with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardio Diagnostics and Flora Growth.

Diversification Opportunities for Cardio Diagnostics and Flora Growth

-0.54

Correlation Coefficient

Cardio Diagnostics  Flora Growth

Excellent diversification

The 3 months correlation between Cardio and Flora is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Flora Growth go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Flora Growth

Given the investment horizon of 90 days Cardio Diagnostics is expected to generate 1.07 times less return on investment than Flora Growth. In addition to that, Cardio Diagnostics is 1.37 times more volatile than Flora Growth Corp. It trades about 0.08 of its total potential returns per unit of risk. Flora Growth Corp is currently generating about 0.11 per unit of volatility. If you would invest  150.00  in Flora Growth Corp on September 5, 2024 and sell it today you would earn a total of  20.00  from holding Flora Growth Corp or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  Flora Growth Corp

Cardio Diagnostics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cardio Diagnostics Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Cardio Diagnostics displayed solid returns over the last few months and may actually be approaching a breakup point.

Flora Growth Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flora Growth Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Flora Growth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardio Diagnostics and Flora Growth

The main advantage of trading using opposite Cardio Diagnostics and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardio Diagnostics position performs unexpectedly, Flora 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 Flora Growth will offset losses from the drop in Flora Growth's long position.

The idea behind Cardio Diagnostics Holdings and Flora Growth Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.